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Mediating Effect of Advertising Expenditure on Labour Productivity - A Case of Manufacturing Industries in Pakistan

Author

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  • Tariq Mahmood

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

This paper explores the possibility that the labour productivity enhancing effects often ascribed to capital intensity may partly act through some mediating variable. The paper uses a mediation model to estimate direct and indirect effects of capital intensity on labour productivity in Pakistan‘s manufacturing industries. The data involve 229 industries at five-digits level of aggregation. The data are taken from Census of Manufacturing Industries for the year 2005-06. Using capital intensity as an independent variable and advertising expenditure as a mediating variable, the paper estimates total, direct, and indirect effects on labour productivity. Approximately 18 percent of total effects on labour productivity are found to be mediated through advertising expenditure. The statistical significance of indirect effects is tested using standard normal tests as well as bootstrap method, and these effects are found to be significant.

Suggested Citation

  • Tariq Mahmood, 2015. "Mediating Effect of Advertising Expenditure on Labour Productivity - A Case of Manufacturing Industries in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(1), pages 1-15.
    • Handle: RePEc:pid:journl:v:54:y:2015:i:1:p:1-15
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    References listed on IDEAS

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    Cited by:

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    2. Khan, Habib Hussain & Kutan, Ali M., 2021. "Testing the structure-conduct-performance relationship for ASEAN: Addressing the issues in the panel mediation," Journal of Asian Economics, Elsevier, vol. 72(C).

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    More about this item

    Keywords

    Productivity; Mediation; Advertising; Industries;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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