Economics and politics of advertising: evidence from the enlarging European Union

Abstract

Purpose

The purpose of this paper is to investigate the impacts of economic and political factors on advertising industry in the enlarging EU.

Design/methodology/approach

The paper employed random effect time series cross‐section (TSCS) models and cross sectional regressions to investigate the impacts of these factors on advertising industry in the enlarging EU.

Findings

It was found that marketers' advertising spending decisions in these economies are driven by consumers' income level and FDI inflow. Civil liberty related variables, on the other hand, were found to moderate the relationship between income and advertising spending.

Practical implications

This paper helps managers and practitioners understand the dynamics of advertising industry in the enlarging EU as well as in other parts of the world. Some fruitful avenues for future research include examination of consumers' perceptions of advertising in the rapidly changing Eastern European countries; use of qualitative methods to deepen the understanding of how consumers make sense of different forms of advertising; and in‐depth analysis of advertising industries in selected economies.

Originality/value

The value of this paper is two‐fold. First, it is one of the most comprehensive cross‐country advertising studies examining the drivers of advertising industries in 28 European countries. Second, it employs TSCS models which allow for differences in behavior over cross sectional units as well as the differences in behavior over time for a given cross section and hence are likely to be consistent with the way the data were generated.

Citation

Kshetri, N., Williamson, N.C. and Schiopu, A. (2007), "Economics and politics of advertising: evidence from the enlarging European Union", European Journal of Marketing, Vol. 41 No. 3/4, pp. 349-366. https://doi.org/10.1108/03090560710728372