Where is the Intersection of Madison Avenue and Wall Street? Advertisement, Local Access to Investment Advice, and Stock Market Participation

57 Pages Posted: 1 Sep 2021 Last revised: 21 Jan 2025

See all articles by Joseph Farizo

Joseph Farizo

University of Richmond - E. Claiborne Robins School of Business

William Christopher Gerken

University of Kentucky - Finance

Ge Wu

University of Richmond

Date Written: January 21, 2025

Abstract

Exploiting variation in household exposure to financial advertising along Designated Market Area (DMA) borders, we find increased advertising by investment advisory firms leads to greater stock market participation. Importantly, this relationship between participation and advertising intensity is concentrated in those areas where the advertising firm maintains a physical presence, and unlike advertising in other industries, we find limited evidence of between-firm spillovers. We document larger effects in areas of low prior advertising and low community trust suggesting advertising’s role in both building awareness and trust.  Our findings highlight the complementary nature of persuasive advertising and local access to financial advice.

Keywords: Stock market participation, Advertising, Trust, Local Access to Finance, Investment advisers

JEL Classification: D14, G24, L84, M37, G20

Suggested Citation

Farizo, Joseph and Gerken, William Christopher and Wu, Ge, Where is the Intersection of Madison Avenue and Wall Street? Advertisement, Local Access to Investment Advice, and Stock Market Participation (January 21, 2025). Available at SSRN: https://ssrn.com/abstract=3914328 or http://dx.doi.org/10.2139/ssrn.3914328

Joseph Farizo

University of Richmond - E. Claiborne Robins School of Business ( email )

Richmond, VA 23173
United States

William Christopher Gerken (Contact Author)

University of Kentucky - Finance ( email )

College of Business & Economics
Lexington, KY 40506-0034
United States

HOME PAGE: http://www.willgerken.com

Ge Wu

University of Richmond ( email )

102 UR Drive
Richmond, VA 23173
United States

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