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An Investigation of Causality between Advertising and Operating Activity: Macro and Micro Evidence from Japan

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  • Kosei Fukuda

Abstract

The relationship between advertising and operating activity is one of the topical issues in marketing and economic research. However, micro data have not been analyzed. In this paper, causality between them is empirically examined by using macro and micro data and applying four models-conventional Vector Autoregressive (VAR) model, vector error correction model, homogeneous parameter panel VAR model and heterogeneous parameter panel VAR model. Granger causality tests are applied to Japanese advertising and operating activity data. Empirical results indicate that operating activity causes advertising and not vice versa.

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  • Kosei Fukuda, 2015. "An Investigation of Causality between Advertising and Operating Activity: Macro and Micro Evidence from Japan," American Journal of Economics and Business Administration, Science Publications, vol. 7(1), pages 23-32, May.
    • Handle: RePEc:abk:jajeba:ajebasp.2015.23.32
    DOI: 10.3844/ajebasp.2015.23.32
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