earticle

영어

This paper analyzed the effect of advertisement on firm performance. In order to increase accuracy, we did use advertising expenses per sales rather than advertising costs. Business activity survey data were taken from the National Statistical Office to study the effect. The firm-level data were made through surveying all companies with more than 50 employees and 300 million won capital. In the paper, net profit per employee, ROA, and ROE were used as firm performance variables. We employed 2SLS to solve endogenous problems. The empirical results showed that advertising expenses make negative influence on achievements of companies in the short run. In addition, Herfindahl-Herschman Index which measures industrial concentration influences negatively on the firm performance.