Causal Effect of Advertisement on Profit and Sales

12 Pages Posted: 5 Aug 2011

See all articles by Sanjeet Singh

Sanjeet Singh

UCRD, Chandigarh University; Chandigarh University

Gagan Deep Sharma

Guru Gobind Singh Indraprastha (GGSIP) University

Mandeep Mahendru

Gian Jyoti Institute of Management & Technology

Date Written: August 5, 2011

Abstract

The present study evaluates the relationship between advertisement expenditure, sales revenue and the profits of companies, which are listed in the National Stock Exchange (NSE).

In the past researchers evaluated the impact of sales on advertisement or sales. The present research will study the impact of the advertisement expenditure, sales revenue and the profits on each other. There is a need of this study.   The tools used for the analysis are descriptive statistics, unit root test, granger causality, VAR (Vector Auto Regression) and Variance Decomposition.   The findings of the research shows that there is a visible impact of the previous years sales on the sale of current year as well as the sale impact the advertisement and profit as well. On the other hand the profit impacts the advertisement.

Keywords: advertisement expenditure, sales revenue, profit, VAR, cause, impact

Suggested Citation

Singh, Sanjeet and Sharma, Gagan Deep and Mahendru, Mandeep, Causal Effect of Advertisement on Profit and Sales (August 5, 2011). Available at SSRN: https://ssrn.com/abstract=1905424 or http://dx.doi.org/10.2139/ssrn.1905424

Sanjeet Singh (Contact Author)

UCRD, Chandigarh University ( email )

National Highway 95
Punjab
Mohali, IN Punjab 140413
India

Chandigarh University ( email )

Gharuan
Mohali
Mohali, Punjab 140413
India

Gagan Deep Sharma

Guru Gobind Singh Indraprastha (GGSIP) University ( email )

Sector 16 C,
Dwarka
Delhi, Delhi 110078
India

Mandeep Mahendru

Gian Jyoti Institute of Management & Technology ( email )

Phase - II
Mohali, Punjab
India

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