Advertising as a Signaling Device in the Swedish Pharmaceuticals Market
نویسندگان
چکیده
The paper empirically studies whether pharmaceutical firms uses advertising as a signal for high quality drugs. A nested random effects count data hurdle model is introduced to handle the excess number of zero observations in the sample as well as nested random drug, firm and substance specific effects. The empirical study indicate that drug quality (measured as the number of side-effects) do not influence pharmaceutical firms decision to advertise or not, but do affect the number of ads in a given period. The higher quality of the drug the more ads.
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