Data and Code for: Advertising, Innovation and Economic Growth

Principal Investigator(s): View help for Principal Investigator(s) Laurent Cavenaile, University of Toronto; Pau Roldan-Blanco, Bank of Spain

Version: View help for Version V1

Name	File Type	Size	Last Modified
Matlab codes			06/03/2020 01:24:PM
Stata codes			06/03/2020 01:25:PM

Project Description

Summary: This paper analyzes the implications of advertising for firm dynamics and economic growth through its interaction with R&D. We develop a model of endogenous growth with firm heterogeneity that incorporates advertising decisions and calibrate it to match several empirical regularities across firm size. Our model provides microfoundations for the empirically observed negative relationship between both firm R&D intensity and growth, and firm size. In the calibrated model, about half of the deviation from proportional firm growth is attributed to our novel advertising channel. In addition, R&D and advertising are substitutes, a prediction for which we find evidence in the data.

Scope of Project

Subject Terms: Endogenous Growth; Advertising; Innovation; Research and Development; Firm Dynamics; Policy

JEL Classification:
      E20 Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data)
      L10 Market Structure, Firm Strategy, and Market Performance: General
      M30 Marketing and Advertising: General
      O31 Innovation and Invention: Processes and Incentives
      O32 Management of Technological Innovation and R&D
      O33 Technological Change: Choices and Consequences; Diffusion Processes
      O41 One, Two, and Multisector Growth Models

Geographic Coverage: United States

Universe: US listed firms.

Data Type(s): administrative records data

Methodology

Data Source:

Standard and Poor's (S&P), 2016: \Compustat-Capital IQ", Wharton Research Data Services, available at https://wrds-www.wharton.upenn.edu/pages/about/data-vendors/sp-global-marketintelligence/.

Unit(s) of Observation: Firms

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Published Versions

V1 [2021-06-18]

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