
doi: 10.2307/2097935
DESPITE a decade of study, economists have been unable to agree on advertising's impact on concentration. Telser [I9], [20], Ekelund, Gramm, and Maurice [5], [6], [7] argue that advertising has no effect on concentration. Mann, Henning, and Meehan [I o], [I I], [I2], [I3] contend that the two are intimately connected. The relationship is interesting for two reasons. First, if advertising increases concentration, one may choose to pass legislation which will stave off this process. Second, advertising may be responsible for the observed increases in concentration in consumer goods industries.' This paper adds a new body of data and a somewhat different slant to the advertising-concentration discussion. It infers a relationship between advertising and sales for firms of different sizes in an industry. It employs data which describe theoretical industries at roughly the five-digit level. And it focuses on changes in concentration rather than levels of concentration. It finds no evidence to suggest that advertising increases concentration either through the conventional scale economies mechanism or through a slightly different process outlined in the following section.
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