Lou, Dong (2013) Attracting investor attention through advertising. The London School of Economics and Political Science, London, UK.
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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. Next, 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: | Monograph (Working Paper) |
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| Official URL: | http://www.lse.ac.uk/ |
| Additional Information: | © 2013 The Author |
| Library of Congress subject classification: | H Social Sciences > HG Finance |
| Journal of Economic Literature Classification System: | G - Financial Economics > G1 - General Financial Markets > G12 - Asset Pricing; Trading volume; Bond Interest Rates G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency; Event Studies |
| Sets: | Departments > Finance Collections > Economists Online |
| Date Deposited: | 15 Nov 2013 12:50 |
| URL: | http://eprints.lse.ac.uk/54382/ |
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