Transformations  in
Business & Economics

Advertising of Domestic and Foreign Firms in Slovenia during Its Ten-Year Transition Period
Marko Lah, Branko Ilič, Urša Golob

ABSTRACT. This paper investigates the economic role of advertising during the ten-year period (1996-2006) which covers Slovenian transition period, including joining the EU and the adoption of euro. The paper addresses the importance of a changing political climate on advertising decisions. It briefly reviews studies of the impact of aggregate advertising on a broader macroeconomic level and concentrates on the differences between advertising in domestic and foreign firms.

During the early stages of transition in Slovenia the growth rates of top Slovenian advertisers, both domestic and foreign, were high but later, as Slovenia was experiencing higher economic growth, they decreased. We argue that the impact of political changes on the advertising behaviour of firms can be observed. No substantial differences between domestic and foreign firms or their subsidiaries regarding advertising behaviour can be found.

KEYWORDS: advertising expenditures, domestic and foreign firms, macroeconomic and political factors of advertising, Slovenia.

JEL classification: E21, M37, P31.