Library Header Image
LSE Research Online LSE Library Services

Attracting investor attention through advertising

Lou, Dong ORCID: 0000-0002-5623-4338 (2009) Attracting investor attention through advertising. Discussion paper (644). Financial Markets Group, The London School of Economics and Political Science, London, UK.

Download (260kB) | Preview


This paper provides empirical evidence that managers adjust firm advertising expenditures to influence investor behavior and short-term stock prices. First, this paper shows that increased advertising spending is associated with individual investor buying and a contemporaneous rise in abnormal stock returns, which is then reversed in subsequent years. Second, there is a significant rise in firm advertising expenditures prior to insider sales and seasoned equity offerings. This large increase is followed by a significant decrease in advertising expenditures in the subsequent year. This pattern of advertising expenditures is consistent with the idea that managers are exploiting the return effect induced by advertising to the benefit of the existing shareholders and/or themselves.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 2009 The author
Divisions: Finance
Financial Markets Group
Subjects: H Social Sciences > HG Finance
H Social Sciences > HB Economic Theory
JEL classification: G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General
Date Deposited: 09 Sep 2010 15:29
Last Modified: 06 Sep 2022 12:39

Actions (login required)

View Item View Item


Downloads per month over past year

View more statistics