15 / 2015-10-09 15:19:38

Effects of Advertising and R&D Expenditure on Enterprise Performance

Abstract Based on data of Chinese companies listed between 2010 and 2012, this paper tests the effect of advertising and R&D expenditure on enterprise performance. We find that advertising expenditure has no significant impact on enterprises’ short-term profitability, but it is positively correlated with enterprises’ long-term value. R&D expenditure is positively correlated with enterprises’ short-term profitability, but has no significant impact on enterprises’ long-term value. We also find that advertising expenditure and R&D expenditure has an interactive effect on enterprises’ short-term profitability, but no significant interactive effect on enterprises’ long-term value.