Advertising Influence on the Profitability of Public and Private Sector Commercial Banks

Abstract

This study examines the influence of advertising on the profitability of public and private sector commercial banks over the period of 2008-2012. Bank’s profitability is measured in terms of return on equity (ROE). The data set includes yearly data for 21 banks operating in Pakistan for more than 10 years. The data has been obtained from the publications of State Bank of Pakistan (SBP) and Financial statements of commercial banks. The regression results show the positive and significant effects of advertising expenditure on Return on equity (ROE) for private sector banks than public sector banks.