Asia Pacific Journal of Business Review

Kyung Hee University Management Research Institute (경희대학교 경영연구원)
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The Investment Always Will Get Gains? Advertising Expenditure and Enterprise Performance Based on Corporate Life Cycle

  • Li, Liang (School of Business, Nanjing University of Information Science and Technology) ;
  • Amine, Bouirig (School of Business, Nanjing University of Information Science and Technology) ;
  • Pang, Yuxin (School of Business, Nanjing University of Information Science and Technology) ;
  • Jiang, Minxing (School of Business, Nanjing University of Information Science and Technology)
  • Received : 2021.12.02
  • Accepted : 2022.02.23
  • Published : 2022.02.28
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Abstract

Based on the concept of advertising expenditure, manufacturing firm performance, and enterprise life cycle, this research conducts the listed Chinese manufacturing listed in 2016-2018 as the research sampling and divides these listed companies into three periods: growth, maturity, and decline. Next, this paper conducts empirical research from three aspects: advertising expenditure or investment and manufacturing firm performance, lag effect of advertising expenditure, and outcome effect and lag effect of advertising investment. It is found that in different stages of manufacturing enterprises, different advertising expenditures will have different impacts on the performance of manufacturing enterprises. In the growth stage, the advertising investment of manufacturing enterprises will significantly affect the performance results of the current period, and there will be the long-term lag effect. In contrast, the mature stage of enterprises' advertising investment has a shorter period of lag effect, while in the recession stage, the mature stage of manufacturing enterprises' advertising investment will have a shorter period of lag effect. The empirical results are not significant. This study provides a reference for manufacturing enterprises in different stages in the decision-making of advertising investment.

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