Source of Publication
International Journal of Research in Marketing
© 2018 Elsevier B.V. A strategic issue facing marketing managers is ‘how much and when’ to spend on advertising. We argue that investor sentiment in the stock market may influence advertising expenditure by affecting firms’ ability to raise new funds. We show that during periods of low (high) investor sentiment, firms decrease (increase) their advertising expenditure, even though the effectiveness of advertising is greater (lower) during such periods. We also find that these results are stronger for financially constrained firms that rely more on external financing. Our findings suggest that marketing managers can improve the efficiency of their advertising expenditure by raising (reducing) it during periods of low (high) sentiment.
Advertising effectiveness, Advertising expenditure, Affordability method, Investor sentiment, Marketing expenditure, Stock market
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 License.
Mian, G. Mujtaba; Sharma, Piyush; and Gul, Ferdinand A., "Investor sentiment and advertising expenditure" (2018). All Works. 2142.
Indexed in Scopus
Open Access Type
Green: A manuscript of this publication is openly available in a repository