A Study On The Impact Of Advertising On The Enterprise Value

With the emergence of the Internet era, microblog, wechat and other new media have been coming out rapidly, the old-fashioned way of information dissemination has been facing a great challenge. At the same time, an increasingly competitive market, the competition mode between enterprises are increasingly diverse, wide range of products thought to grab the attention of consumers, advertising in this way becomes increasingly important. It is widely believed that advertising as an investment in intangible assets, it can improve the visibility of their products, expand sales of their products, establish corporate brand equity establish a positive image of business, and even enhance corporate value, etc. Adverting is playing a pivotal role. So, how’s the practical effect of corporate advertising? With the development of the advertising industry and the increasing advertising investment, the problem quickly became the focus of attention and investment in corporate advertising constitute a constant study of the mainline.Foreign studies about advertising expenditure are very early and comprehensive. They are mainly using empirical research methods to verify the effect of advertising, Firstly, its researches are about the relationship between advertising and sales, the relationship between advertising and stock value, between the performance of the company, then the researches begin to study about the advertising and business risk, stock liquidity and the relationship between the cost of capital. Today, more and more scholars focus on the relationship between advertising expenditure and firm’s value. In contrast, domestic scholars on this subject are not many. Most of them put the adverting as an intangible asset, the study of adverting expenditure is only superficial.Through domestic and international literature review, the theoretical analysis of the effect of advertising, we put forward two research hypothesis:ad spending that year has a significant positive correlation with the year of enterprise value, the year after also has a positive correlation, However, the degree of correlation is less. Based on this assumption, the paper constructed the Tobin Q value as the dependent variable, ad spending as the independent variable, corporate profitability, financial leverage and firm size as control variables, establishing multivariate regression model to inspect. Select the2010-2012food and beverage industry of China’s A-share listed companies as samples. This paper shows that: in the year the advertising investment and enterprise value has a positive correlation. The correlation between ad spending in year t and corporate value in the year t+1is significantly positive. But, the correlation between ad spending in year t and corporate value in the year t+2is not significantly positive.The main innovations of this paper are about:putting advertising as an undisclosed investment in intangible assets to study its impact on the enterprise value, the content is new; using empirical research methods to study,the method is new; select food and beverage industry as the research object, the perspective and data are new. However, as this study selected only three years of data, but only explored the food, beverage an industry, there are still many articles defects and deficiencies; hope that future research could be extended to the entire market.