The determinants of advertising intensity in Canadian manufacturing industry, 1973
Date
1987
Authors
Robinson, David John
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Abstract
The purpose of this thesis is to examine the inter-industry determinants of advertising intensity (the advertising / sales ratio ) in Canadian manufacturing for 1973. The sample is composed of 67 industries which can be sub-divided into convenience, non-convenience and producer good sub-sets.
Analytically, we develop a single equation model on the determination of optimal advertising levels. Chapter 2 discusses the structural variables in the equation and their expected relationship to advertising intensity. In particular we consider a non-linear relationship with concentration.
The empirical results are presented in Chapters 3 and 4. Chapter 3 analyses the results of the quadratic concentration-advertising relationship. In Chapter 4 we examine the results generated for the remaining explanatory variables and draw conclusions in relation to their effect on advertising intensity.
Chapter 5 presents a summary of the conclusions. The most notable is perhaps the considerable evidence found in favour of the quadratic concentration-advertising relationship. The signs on the remaining explanatory variables are largely as expected. Since we estimated the model for varying levels of industrial concentration, in some cases we found evidence of different behavioural patterns related to the levels of industry concentration.
Appendices A and B present the sources of data and the industry sample respectively. Appendices C and D present graphical analysis of the concentration-advertising relationship and the results on the linear specification respectively. The Ridge Regression results were used as a test for multi-collinearity and are presented in Appendix E.