Advertising, product market competition and stock returns

Huong Le, Andros Gregoriou, Tung Nguyen

Research output: Contribution to journalArticlepeer-review


This paper studies the joint effect of advertising intensity and product market competition on stock returns. Using a sample of the US market over the period from 1977 to 2018, we provide evidence that past advertising is negatively associated with stock returns and this relationship exists only for firms in competitive industries. Also, firms in competitive markets earn higher expected stock returns than firms in concentrated industries, especially among low advertising intensity groups. Our results are robust across alternative subsamples and product market competition measures. Our empirical estimates support the positive causal effect of concentration on advertising.
Original languageEnglish
Pages (from-to)1605-1628
Number of pages24
JournalReview of Quantitative Finance and Accounting
Issue number4
Publication statusPublished - 15 Mar 2023


  • Advertising intensity
  • Product market competition
  • Stock returns


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