FBA-FBE Brown Bag Seminar: Predatory Advertising

E22-2007, Faculty of Business Administration

Event Information

Event NameFBA-FBE Brown Bag Seminar: Predatory Advertising
CategoriesSeminar / Lecture
OrganizerFaculty of Business Administration
SpeakerProf. Shantanu BANERJEE
Date04 December 2019
Time15:00 - 16:30
VenueE22-2007, Faculty of Business Administration
ContentAbstract
We examine how an industry leader’s competitors respond when financial fraud by the leader is publicly revealed. We document evidence of predatory advertising – close competitors of the leader step up advertisement spending relative to control firms. Although we do not directly observe product prices, we find that profit margins drop, consistent with predatory pricing. Predatory advertising is stronger when the fraud firm has higher leverage, and when the average leverage of rival firms is lower. The effects appear mainly in industries that produce customized products and consumer switching costs are high. Increasing advertising expenditure appears to be a more potent predatory strategy in industries that experience new customer growth, whereas cutting prices appears more potent in industries with stagnant customer base.

Short Biography
Professor Shantanu Banerjee joined as a Lancaster University in 2005 after finishing his doctoral studies at Hong Kong University of Science and Technology (HKUST). He specializes in empirical research in Corporate Finance topics including the investment decisions of firms, financing choice, product market strategy, IPO, bankruptcy, executive compensation and corporate social responsibility. His work has been published in journals such as the Journal of Finance, Review of Finance, Journal of Corporate Finance, European Journal of Operational Research and Journal of Business Ethics. He is the director of the PhD programme (Finance area) at Lancaster and organizes several annual workshops and research events on Corporate Finance. Before starting the doctoral programme in Finance in HKUST, he studied in Economics in India and has an MPhil degree in Economics from Centre for Economic Studies and Planning, Jawaharlal Nehru University (JNU), India. A brief summary of his current and published work can be found at: https://sites.google.com/view/shantanu-banerjee/home.
Target AudienceAll are welcome
LanguageEnglish

Contact Person for Details

NameAnnie Sun
Tel.No8822 4716
Fax8822 2377
Emailanniesun@um.edu.mo