IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v9y2002i12p763-767.html
   My bibliography  Save this article

Advertise or die: advertising and market share dynamics revisited

Author

Listed:
  • Kelly Bird

Abstract

This paper estimates the effect of advertising expenditure on market shares of the seven leading firms in the Indonesian cigarette industry using recent advances in time series analysis, namely the error correction model. Own and rival's advertising elasticities for the short run and long run are estimated. In addition, the 'durability' of advertising effects is estimated. Empirical results show that the effect of advertising on market shares is relatively short-lived, appearing to be substantially depreciated within one year for all firms. It is also found that advertising is less effective for foreign firms in the Indonesian market.

Suggested Citation

  • Kelly Bird, 2002. "Advertise or die: advertising and market share dynamics revisited," Applied Economics Letters, Taylor & Francis Journals, vol. 9(12), pages 763-767.
    • Handle: RePEc:taf:apeclt:v:9:y:2002:i:12:p:763-767
    DOI: 10.1080/13504850110086053
    as

    Download full text from publisher

    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/13504850110086053&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504850110086053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Metwally, M M, 1975. "Advertising and Competitive Behaviour of Selected Australian Firms," The Review of Economics and Statistics, MIT Press, vol. 57(4), pages 417-427, November.
    2. Boyd, Roy & Seldon, Barry J., 1990. "The fleeting effect of advertising : Empirical evidence from a case study," Economics Letters, Elsevier, vol. 34(4), pages 375-379, December.
    3. Thomas, Lacy Glenn, 1989. "Advertising in Consumer Goods Industries: Durability, Economies of Scale, and Heterogeneity," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 163-193, April.
    4. Mark J. Roberts & Larry Samuelson, 1988. "An Empirical Analysis of Dynamic, Nonprice Competition in an Oligopolistic Industry," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 200-220, Summer.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Steffen Huck & Kai A. Konrad & Wieland Müller, 2002. "Merger and Collusion in Contests," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(4), pages 563-575, December.
    2. Nelson Sá, 2015. "Market concentration and persuasive advertising: a theoretical approach," Journal of Economics, Springer, vol. 114(2), pages 127-151, March.
    3. Caroline Elliott & Yingqi Wei & Pamela Lenton, 2010. "The Effect Of Government Policy On Tobacco Advertising Strategies," Bulletin of Economic Research, Wiley Blackwell, vol. 62(3), pages 243-258, July.
    4. Seldom, Barry J. & Jung, Chulho, 1995. "The length of the effect of aggregate advertising on aggregate consumption," Economics Letters, Elsevier, vol. 48(2), pages 207-211, May.
    5. Torsten Steinrücken & Sebastian Jaenichen, 2009. "Preisregulierung zum Schutz der Verbraucher: Wirkungen auf Werbung und Wohlfahrt," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 78(3), pages 188-201.
    6. Steen, Frode & Sorgard, Lars, 1999. "Semicollusion in the Norwegian cement market," European Economic Review, Elsevier, vol. 43(9), pages 1775-1796, October.
    7. Golan, Amos & Karp, Larry & Perloff, Jeffrey M., 1999. "Estimating Coke and Pepsi's price and advertising strategies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6rf8j6m4, Department of Agricultural & Resource Economics, UC Berkeley.
    8. Henry Saffer & Frank Chaloupka, 1999. "Tobacco Advertising: Economic Theory and International Evidence," NBER Working Papers 6958, National Bureau of Economic Research, Inc.
    9. Lynn Hunnicutt & David Aadland, 2002. "Market Power with Dynamic Invertory Constraints: The Bias in Standard Measures," Working Papers 2002-15, Utah State University, Department of Economics.
    10. Naufel J. Vilcassim & Vrinda Kadiyali & Pradeep K. Chintagunta, 1999. "Investigating Dynamic Multifirm Market Interactions in Price and Advertising," Management Science, INFORMS, vol. 45(4), pages 499-518, April.
    11. Benedetto Molinari & Francesco Turino, 2018. "Advertising and Aggregate Consumption: A Bayesian DSGE Assessment," Economic Journal, Royal Economic Society, vol. 128(613), pages 2106-2130, August.
    12. An-Hsiang Liu & Ralph Siebert, 2020. "The Competitive Effects of Declining Entry Costs over Time: Evidence from the Static Random Access Memory Market," CESifo Working Paper Series 8552, CESifo.
    13. Kai-Lung Hui & I. P. L. Png, 2015. "Research Note—Migration of Service to the Internet: Evidence from a Federal Natural Experiment," Information Systems Research, INFORMS, vol. 26(3), pages 606-618, September.
    14. Evans, William N. & Ringel, Jeanne S., 1999. "Can higher cigarette taxes improve birth outcomes?," Journal of Public Economics, Elsevier, vol. 72(1), pages 135-154, April.
    15. Massimo Motta, 2013. "Advertising bans," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(1), pages 61-81, March.
    16. Wang, Shinn-Shyr & Stiegert, Kyle W., 2006. "The Duopolistic Firm with Endogenous Risk Control: Case of Persuasive Advertising and Product Differentiation," Staff Paper Series 496, University of Wisconsin, Agricultural and Applied Economics.
    17. Griffith, Rachel & Smith, Kate & Krol, Michal, 2015. "Store Brands and the Role of Advertising," CEPR Discussion Papers 10877, C.E.P.R. Discussion Papers.
    18. Ali Goli & Simha Mummalaneni & Pradeep K. Chintagunta & Sanjay K. Dhar, 2022. "Show and Sell: Studying the Effects of Branded Cigarette Product Placement in TV Shows on Cigarette Sales," Marketing Science, INFORMS, vol. 41(6), pages 1163-1180, November.
    19. Steen, Frode & Salvanes, Kjell G., 1999. "Testing for market power using a dynamic oligopoly model," International Journal of Industrial Organization, Elsevier, vol. 17(2), pages 147-177, February.
    20. Rajeev Goel, 2011. "Persistence of cigarette advertising across media and smoking rates," Applied Economics Letters, Taylor & Francis Journals, vol. 18(7), pages 611-619.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:9:y:2002:i:12:p:763-767. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.