American Journal of Economics and Business Administration

An Investigation of Causality between Advertising and Operating Activity: Macro and Micro Evidence from Japan

Kosei Fukuda

DOI : 10.3844/ajebasp.2015.23.32

American Journal of Economics and Business Administration

Volume 7, Issue 1

Pages 23-32

Abstract

The relationship between advertising and operating activity is one of the topical issues in marketing and economic research. However, micro data have not been analyzed. In this paper, causality between them is empirically examined by using macro and micro data and applying four models-conventional Vector Autoregressive (VAR) model, vector error correction model, homogeneous parameter panel VAR model and heterogeneous parameter panel VAR model. Granger causality tests are applied to Japanese advertising and operating activity data. Empirical results indicate that operating activity causes advertising and not vice versa.

Copyright

© 2015 Kosei Fukuda. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.