Abstract

Two contradictory schools of thought—the activists and the determinists—predict that either diffusion of knowledge (e.g., through advertising) leads to economic growth or that economic growth increases marketing and advertising activities. This study assesses the causal relation between corporate advertising expenditures and private consumption applying vector autoregressive (VAR) models to aggregate German quarterly data from 1991 to 2009. Results indicate a break in the advertising-consumption relation after the dot-com crisis. Hence, the macroeconomic advertising-consumption relation is not stable over time. Since 2001, consumption has Granger-caused advertising expenditures. This change suggests a higher relevance of consumer behavior for advertising budgeting decisions. ...

Additional Information

ISSN
2475-1790
Launched on MUSE
2014-09-17
Open Access
N
Back To Top

This website uses cookies to ensure you get the best experience on our website. Without cookies your experience may not be seamless.