Research on the impact of advertising and R&D Investment on the profitability of China’s fastmoving consumer goods companies(PDF)
《长安大学学报（社科版）》[ISSN:1671-6248/CN:61-1391/C]
- Issue:
- 2020年06期
- Page:
- 61-74
- Research Field:
- 经济与管理
- Publishing date:
Info
- Title:
- Research on the impact of advertising and R&D Investment on the profitability of China’s fastmoving consumer goods companies
- Author(s):
- YANG Xiuyun1; YI Chen2; GAO Shuanping1
- 1. School of Business, Xiamen Institute of Technology, Xiamen 361021, Fujian, China; 2. School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710061, Shaanxi, China
- Keywords:
- fast moving consumer goods; advertising investment; R&; D investment; differentiation; profitability; lagging effect; interaction
- PACS:
- F272
- DOI:
- -
- Abstract:
- In order to study the effective investment methods of Chinese fastmoving consumer goods (FMCG) companies in the two product differentiation strategies of advertising and R&D, and to explore the impact of advertising and R&D investment on the profitability of FMCG companies in different regions with different types of ownerships, this paper selects relevant indicators such as the advertising density, R&D intensity, and main business profit margins of listed FMCG companies in China from 2012 to 2017 as research data, and uses the panel data multiple regression method to empirically test the relationship between advertising and R&D investment and profitability as well as the interaction between the two product differentiation strategies. On the other hand, it conducts grouped regression of samples and discusses the differences in the impact effects of advertising and R&D investment on profitability in different situations according to the region and ownership types of samples. The study found that: firstly, both advertising and R&D investment have a significant positive impact on the profitability of Chinese FMCG companies, and this impact has a lagging effect; secondly, advertising and R&D investment have a synergistic effect on profitability; thirdly, there are regional differences and ownership differences in the impact of the two competitive strategies on the profitability of enterprises. The results show that Chinese FMCG companies should appropriately invest in advertising and strengthen R&D investment, and in the process of marketization and property rights diversification reform, FMCG companies need to continuously optimize the allocation of advertising and R&D investment according to their own conditions, in order to form the uniqueness of differentiation in their own products and the sustainability of corporate profitability.
Last Update: 2021-01-29