Lou, Dong 
ORCID: 0000-0002-5623-4338
(2014)
Attracting investor attention through advertising.
Review of Financial Studies, 27 (6).
1797 - 1829.
ISSN 0893-9454
Abstract
This paper provides evidence that managers adjust firm advertising, in part, to attract investor attention and influence short-term stock returns. First, I show that increased advertising spending is associated with a contemporaneous rise in retail buying and abnormal stock returns, and is followed by lower future returns. Second, I document a significant increase in advertising spending prior to insider sales and a significant decrease in the subsequent year. Additional analyses suggest that the inverted V-shaped pattern in advertising spending around insider sales is most consistent with managers' opportunistically adjusting firm advertising to exploit the temporary return effect to their own benefit.
| Item Type: | Article |
|---|---|
| Official URL: | http://rfs.oxfordjournals.org/ |
| Additional Information: | © The Author and Oxford University Press |
| Divisions: | Finance |
| 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: | 23 May 2014 13:13 |
| Last Modified: | 05 Oct 2025 07:27 |
| URI: | http://eprints.lse.ac.uk/id/eprint/46330 |
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