IDEAS home Printed from https://ideas.repec.org/a/taf/ecinnt/v25y2016i1p33-56.html

Advertising and R&D: theory and evidence from France

Author

Listed:
  • Philippe Askenazy
  • Thomas Breda
  • Delphine Irac

Abstract

Advertising and innovation are two engines for firms to escape competition and improve profits. We propose a model that encompasses both the static and dynamic interactions between R&D, advertising and competitive environment. It provides three main predictions. First, for a given competitive environment, quality leaders spend more in advertising in order to extract maximal rents; thus, lower costs of ads may favor R&D. Second, the inverted-U relation between competition and R&D still holds with the introduction of advertising. Third, more competition is associated with on average more advertising expenditures. Empirical evidence from a large panel of 59,000 French firms over 1990-2004 supports these three properties.

Suggested Citation

  • Philippe Askenazy & Thomas Breda & Delphine Irac, 2016. "Advertising and R&D: theory and evidence from France," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(1), pages 33-56, January.
    • Handle: RePEc:taf:ecinnt:v:25:y:2016:i:1:p:33-56
    DOI: 10.1080/10438599.2015.1046670
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10438599.2015.1046670
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10438599.2015.1046670?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Messner, Wolfgang & Migliorini, Monica, 2024. "Fifty Shades of Ads. The Influence of Cultural and Institutional Factors on Television Advertisement Expenditure," Journal of International Management, Elsevier, vol. 30(6).
    2. Kwon, He-Boong & Lee, Jooh & Choi, Laee, 2022. "Dynamic interplay of operations and R&D capabilities in U.S. high-tech firms: Predictive impact analysis," International Journal of Production Economics, Elsevier, vol. 247(C).
    3. Jian Xu & Feng Liu & You-hua Chen, 2019. "R&D, Advertising and Firms’ Financial Performance in South Korea: Does Firm Size Matter?," Sustainability, MDPI, vol. 11(14), pages 1-16, July.
    4. Parisa Pourkarimi & Gamal Atallah, 2020. "The Impact of Cooperative R&D and Advertising on Innovation and Welfare," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 18(1), pages 143-167, March.
    5. Su, Zhifang & Wang, Luhan & Liao, Jing & Cui, Xin, 2023. "Peer effects in corporate advertisement expenditure: Evidence from China," Research in International Business and Finance, Elsevier, vol. 64(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ecinnt:v:25:y:2016:i:1:p:33-56. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/GEIN20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.