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This study aims to identify the relationship between advertisement spending and performance in the immediate aftermath of economic recession. Study investigated that the output of hospitality firms were positively influenced with high spending on advertisement, right after a global economic recession. This relationship was found by using ERC (earning response coefficient) analysis linked with OLS regression models. Findings revealed that after economic recession, increased advertising expenses positively influence the performance of hospitality firms in a long-run. These results have practical implications, as they provide immense guidance for hospitality managers to improve risk response strategies during financial losses caused by some economic shocks.
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