Advertising, Visibility, and Stock Turnover

44 Pages Posted: 18 Mar 2010

See all articles by Keith Vorkink

Keith Vorkink

Brigham Young University - J. Willard and Alice S. Marriott School of Management

Eric DeRosia

Brigham Young University - Department of Business Management

Glenn Christensen

Brigham Young University - Department of Business Management

Grant Richard McQueen

Brigham Young University - Department of Business Management

Date Written: March 15, 2010

Abstract

We further the understanding of cross-sectional differences in trading activity. Specifically, we link a firm’s visibility, as measured by advertising, to its stock turnover. First, we suggest three mechanisms (beyond simple awareness) capable of explaining how the repeated and consistent ads from well-known firms in the marketplace are linked to turnover. Second, using a data base of firms reporting advertising between January 1971 and December 2007, we regress average daily turnover within a year on annual ad spending for the year and find a positive and significant coefficient after controlling for extant determinants of turnover. Third, using a twenty year Super Bowl advertising event study, we again document a positive relationship between advertising and turnover.

Keywords: stock turnover, advertising, visibility, behavioral finance, Super Bowl

JEL Classification: G14, G10, D83, C21

Suggested Citation

Vorkink, Keith and DeRosia, Eric and Christensen, Glenn and McQueen, Grant R., Advertising, Visibility, and Stock Turnover (March 15, 2010). Available at SSRN: https://ssrn.com/abstract=1572097 or http://dx.doi.org/10.2139/ssrn.1572097

Keith Vorkink

Brigham Young University - J. Willard and Alice S. Marriott School of Management ( email )

Provo, UT 84602
United States

Eric DeRosia

Brigham Young University - Department of Business Management ( email )

Provo, UT 84602
United States
(801) 473-5051 (Phone)

Glenn Christensen

Brigham Young University - Department of Business Management ( email )

Provo, UT 84602
United States
(801) 422-1773 (Phone)

Grant R. McQueen (Contact Author)

Brigham Young University - Department of Business Management ( email )

TNRB 636
Provo, UT 84602
United States
801-422-3017 (Phone)

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