Investigation the effects of "firms size" and "advertisement cost" on the growth of food and beverage Industrial firms in Iran

In the economic literature, there is no specific relationship between advertising costs and firm growth, and conflicting results have been observed in empirical studies. This paper examines the impact of firm size and advertising expenditures on the growth of food and beverage industry firms during the period of 1977-2007 in Iran. Model estimation using panel data and constant effects method indicates that advertising has a positive and significant effect on firm growth. The results also indicate that the firm's growth rate is independent of firm size at the beginning of the period.