The Moderating Effect Of Heterogeneous Beliefs On The Relationship Between Advertising And Firm Value

Recent years, with the rapid development of Internet, more and more advertising methods and approaches are emerged, the importance of advertising also have been recognized by more companies. All of us know that advertising will enhance brand capability and company reputation, many scholars have done some research on this area, and they acquired some outstanding achievements, affirmed the position of advertising in corporate marketing. Advertising will bring up some influences to company sales performance, bu t can advertising expenditure affect corporate financial markets performance at the same time? So far, the research in this area is still not widely, western scholars have done some correlation research about the relationship between advertising and firm v alue, but they didn’t draw a unanimous conclusion. So, as so far, there is no authority attitude on if this relationship is really exists, and the mechanism of this relationship is also.The aim of this paper is to extend and improve the previous research, western scholars have examined the relationship between advertising and firm stock markets performance, so at first I will verify the relationship between advertising and firm value of manufacturing industry in our country. Secondly, this paper will introduce a factor, heterogeneous beliefs, discuss the influence of heterogeneous beliefs on the relationship between advertising and firm value. Furthermore, the conclusion will provide decision-making basis to managers and improve the mechanisms between advertising and firm value.This paper adopts empirical study, all the data are from compan ies annual report and financial database, include WIND,RESSET, CSMAR and GENIUS FINANCE. The sample data is Shanghai and Shenzhen A share listed company, use STATA11 to regression analysis. Eventually, through theoretical and empirical research, I confirmed that in domestic manufacturing company, the increase of advertising expenditure will increase firm value, and the relationship will be negative moderated by investor heterogeneous beliefs and investor-manager heterogeneous beliefs.