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Advertising and Investor Recognition of Banking Firms: Evidence from Taiwan

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  • Tsai-Ling Liao
  • Hao-Chang Sung
  • Min-Teh Yu

Abstract

This study examines the effect of advertising expenditure on strengthening a firm’s intangible capital and firm value by attracting the public on the firm’s visibility and then investigates the role of advertising expenditures on a banking firm’s market value, liquidity, and breadth of ownership. The empirical results find that the advertising has a significantly positive effect on banking firm’s share value, liquidity, and institutional holdings. Consequently, this study concludes that advertising benefits banking firms through increased investor perceptions of such firms. In particular, the findings provide additional support for the home bias phenomena, in which investors prefer to invest in familiar stocks.

Suggested Citation

  • Tsai-Ling Liao & Hao-Chang Sung & Min-Teh Yu, 2016. "Advertising and Investor Recognition of Banking Firms: Evidence from Taiwan," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(4), pages 812-824, April.
  • Handle: RePEc:mes:emfitr:v:52:y:2016:i:4:p:812-824
    DOI: 10.1080/1540496X.2015.1117851
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    Cited by:

    1. Carlos Francisco Alves & Ana Luísa Nogueira Parada Ferreira e Silva, 2018. "Coverage news and companies’ stock abnormal returns," FEP Working Papers 608, Universidade do Porto, Faculdade de Economia do Porto.
    2. Liu, Shasha & Zhao, Huixian & Kong, Gaowen, 2023. "Enterprise digital transformation, breadth of ownership and stock price volatility," International Review of Financial Analysis, Elsevier, vol. 89(C).

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