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Backfires on firms' intangible assets of the casino industry in Macau and Las Vegas: investigating advertising expenditure

Li Huang (University of Macau, Macau SAR, China)
Matthew Tingchi Liu (University of Macau, Macau SAR, China)

Asia Pacific Journal of Marketing and Logistics

ISSN: 1355-5855

Article publication date: 18 November 2021

Issue publication date: 9 September 2022

350

Abstract

Purpose

This study quantifies the casino-industry-specific intangible assets and brand equity models from a different perspective (relative to Interbrand approach, or EquiTrend approach) to investigate the relationship between advertising expenditure and firms' intangible assets in the casino industry.

Design/methodology/approach

This study collected the casino's data from the financial reports during the period of 2007–2018. The proposed model incorporates a brand structure moderator, and the peculiar characteristics (e.g. ΔS, HHI) of the casino industry based on previous research. We constructed three models for dependent variables using Tobin's Q−1. Model (1, 2, 3) as the primary regressions to firms' intangible assets (and thus serving as tests of hypotheses), as depicted in the diagrams of the firm's brand equity in different scenarios.

Findings

The results suggest that: (1) advertising expenditure has an adverse effect on firms' intangible assets; (2) the coefficients associated with brand structure dummy variables are both positive and significant; and the adverse effect is stronger for firms with house-of-brand's (HOB) and brand of house (BH) structure than for those with mixed branding structure (BH-HOB hybrid); (3) global brands have higher brand equity than local brands, with higher variance over time.

Originality/value

This study gives new evidence of the negative effect of advertising on the casino industry, which primarily reports the adverse effect of advertising in a sinful industry. Meanwhile, the proposed FBBE models can be an efficient tool to monitor a firm's annual brand equity performance with respect to their major competitors in the market.

Keywords

Acknowledgements

The work was funded by research committee of University of Macau (Ref. No: MYRG2019-00037-FBA).

Citation

Huang, L. and Liu, M.T. (2022), "Backfires on firms' intangible assets of the casino industry in Macau and Las Vegas: investigating advertising expenditure", Asia Pacific Journal of Marketing and Logistics, Vol. 34 No. 9, pp. 1956-1975. https://doi.org/10.1108/APJML-07-2021-0540

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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