Research On The Effect Of Brand Competitiveness And Debt Financing On Advertising Competition

After 1980s intermediate stages, the pattern, which the corporate finance scholar and the industrial economics scholar were independent from each other, starts to break up. Meanwhile, the relationship between debt financing decision and product market competition also calls theorists'enough attention. But the theories and the experiences were based on the impact of debt financing decision on production competition and price competition. Indeed, product market competition consists of product competition, price competition, advertising competition and so on. The effect of advertisement is reflected in the differenced of brand. This research analyses the difference between high-end brand corporate and low-end brand corporate which the effect of debt financing decision on advertising competition.At first, the paper introduces the manifestations of brand competitiveness and the theory of adv investment. Meanwhile, this test gives an overall review of the development capital structure theory and the theoretical achievement. Then, the relationship among brand competitiveness, advertising competition and debt financing decision have been explained. Subsequently, we choose the data of the listed companies to the empirical study. The main works of this paper are organized as follows:①we choose industry which prefers advertising investment, includes pharmaceutical and biological products, alcohol and alcohol beverage manufacturing sector, textile, transportation equipment manufacturing and real estate;②We classify the sample companies by whether have well-known trademarks in China, zhonghualaozihao, real estate top-10, and study the groups'difference of financial index by the independent samples t-test;③Based on the regression analysis of the financial variable and Stability test, we studied the different influence of the debt financing on advertising competition when brand competitiveness is introduced.We conclude the result of the empirical study as follow: in strong-brand corporate team, there are significant positive correlation between leverage and advertising investment. But in weak-brand corporate team, there are significant negative correlation between leverage and advertising investment. For strong-brand corporate, the soft commitment of debt financing to advertising investment. Then, for weak-brand corporate, the hard commitment of debt financing to advertising investment. Also, we conclude that whatever the competition strategy of strong-brand corporate is, the strategy of weak-brand corporate will not be affected. This shows that the closely relationship between the effect of debt financing on advertising competition and brand value in our country. High-end brand corporate expand financing channels by brand-advantage. So, low-end brand corporate should pay attention to brand building. The study results,the financing of China's listed companies have some decision-making practice of the reference value.