Research Article Open Access

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

Kosei Fukuda1
  • 1 Chuo University, Japan

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.

American Journal of Economics and Business Administration
Volume 7 No. 1, 2015, 23-32

DOI: https://doi.org/10.3844/ajebasp.2015.23.32

Submitted On: 12 February 2015 Published On: 29 May 2015

How to Cite: Fukuda, K. (2015). An Investigation of Causality between Advertising and Operating Activity: Macro and Micro Evidence from Japan. American Journal of Economics and Business Administration, 7(1), 23-32. https://doi.org/10.3844/ajebasp.2015.23.32

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Keywords

  • Advertising
  • Granger Causality
  • Operating Activity
  • Panel VAR