Do Concentrated Markets Spend More on Advertising? Evidence on Nondurable Consumer Goods Industries

Abstract

This study explores the relationship between market concentration and the level, intensity and distribution of industry advertising. Industry and top four firm annual advertising expenditures in 12 established consumer nondurable product groups are positively and significantly related to market concentration. These results hold for a relatively homogeneous subset of product categories, for alternative functional forms, and for alternative measures of advertising.