Examining the Relationship Between Advertising Expenditures and Sales of Quick-Service Restaurants in the United States

Abstract

The United States fast-food industry represents an important business sector with respect to national and international economics. Due to the low levels of product differentiation and high industry competition, fast-food companies heavily engage in advertising and branding activities. Quick-service restaurants (QSR) are the largest and growing segment of the fast-food industry. The current study examined the longitudinal relationship between advertising expenditures and sales revenues for the QSR industry and leading QSR brands in the United States from 1986 to 2007. Hypotheses were tested using a time-series regression analysis. Managerial, research, and policy implications of the results are provided.

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