PT  - JOURNAL ARTICLE
AU  - Surinder Tikoo
AU  - Ahmed Ebrahim
TI  - Financial Markets and Marketing
AID  - 10.2501/S0021849910091178
DP  - 2010 Mar 01
TA  - Journal of Advertising Research
PG  - 50--56
VI  - 50
IP  - 1
4099  - http://www.journalofadvertisingresearch.com/content/50/1/50.short
4100  - http://www.journalofadvertisingresearch.com/content/50/1/50.full
SO  - J Advert Res2010 Mar 01; 50
AB  - This article examines the association between stock returns and earnings changes of firms that have made different tradeoffs with respect to R&D and advertising spending during an economic downturn. During the 2000–2002 bear market that was associated with a downturn in the U.S. economy, we find the coefficient that relates stock returns and earnings changes to be significantly greater for firms that increased their advertising expenditures and decreased their R&D expenditures than for firms that increased their R&D expenditures and decreased their advertising expenditures. Our results suggest that investors perceive that an increased emphasis on advertising can enable firms to stem earnings erosion that can potentially occur during an economic downturn.