The Behavioral and Intermediate Effects of Advertising on Firm Performance: An Empirical Investigation of the Restaurant Industry

Abstract

The purpose of this study was to identify tangible and intangible gains resulting from advertising in restaurant businesses from both the marketing and finance/accounting perspectives. Specifically, this study examined both behavioral and intermediate effects of advertising on consumer behavior and firm performance. Annual sales, profit, Tobin’s Q, and advertising expenditure of 119 restaurant firms from 1991 to 2012 were used for data analysis. The findings revealed that advertising led to an immediate increase in consumer demand, but failed to improve profit. The effect of advertising on sales and profit through brand equity was found to be insignificant. This study suggests a new angle on the use of advertising and brand strategies in the restaurant industry and discusses potential directions for future research.

Uncertainty risks and strategic reaction of restaurant firms amid COVID-19: Evidence from China

“…Brand equity ( BRAND ) and discount options ( DISCOUNT ) were the other foci of this analysis. Brand equity is net benefits that brands provide compared to non-brands ( Kim et al, 2018 ). Discount serves as a small monetary incentive to customers.…”

Analisis Pengaruh Belanja Iklan terhadap Kinerja Perusahaan dengan Corporate Social Responsibility sebagai Variabel Moderasi

“…Penelitian serupa oleh Sridhar, Narayanan, dan Srinivasan (2014) menunjukkan hubungan positif antara belanja iklan dengan kinerja keuangan perusahaan yang diukur dengan penjualan dan nilai perusahaan. Kim et al (2018) menunjukkan bahwa belanja iklan berpengaruh positif terhadap penjualan perusahaan, namun berdampak negatif pada profitabilitas dan nilai perusahaan. Namun, dalam penelitian yang lain, Kim et al (2019) menyimpulkan dampak positif belanja iklan baik terhadap penjualan, profitabilitas, maupun nilai saham perusahaan.…”

“…Hasil dari penelitian tersebut menunjukkan bahwa belanja iklan meningkatkan kinerja penjualan perusahaan. Kim et al (2018) melakukan penelitian serupa untuk menguji pengaruh belanja iklan terhadap kinerja penjualan dengan pendekatan dinamis dan kuadratik. Penelitian tersebut memberikan hasil yang sama yaitu bahwa belanja iklan berpengaruh positif dan signifikan terhadap kinerja penjualan perusahaan.…”

“…Selain terhadap penjualan, Kim et al (2018) juga menguji hubungan belanja iklan terhadap profitabilitas perusahaan. Penelitian tersebut menunjukkan bahwa belanja iklan memberikan dampak positif bagi profitabilitas hingga pada titik optimum.…”

Is environmental innovation conducive to corporate financing? The moderating role of advertising expenditures

“…Advertising expenditures have always played an important role in strategic management and consumer behavior theory. Strategic management and consumer behavior theory focuses mainly on examining the impact of advertising expenditures on market concentration (Oliveira & Oliveira, 2018); barriers to entry, purchase behaviors, or intentions (Rajabi, Dens, De Pelsmacker, & Goos, 2017;Thornhill, Xie, & Lee, 2017), profits (Chen & Waters, 2017;Kim, Jun, Tang, & Zheng, 2018), and so on. However, there are few studies on the relationship between corporate advertising expenditures, environmental innovation, and resource acquisition.…”