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1 THE CONSOLIDATION OF THE GLOBAL ADVERTISING INDUSTRY: LESSONS FOR (2010)
BibTeX
@MISC{Firms101the,
author = {Law Firms and Andrew Von Nordenflycht},
title = {1 THE CONSOLIDATION OF THE GLOBAL ADVERTISING INDUSTRY: LESSONS FOR},
year = {2010}
}
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Abstract
While existing literature assumes that the human capital intensity of professional services leads to small and flimsy firms, several professional services feature large, long-lived firms. To develop insights about firm size and industry structure in human capital intensive industries, I analyze the structure and evolution of the advertising industry. Drawing on a range of quantitative and qualitative evidence, I develop two hypotheses regarding the industry’s structure and consolidation: (1) size differentiation, in which firm size and industry structure are connected to the size distribution of clients ’ projects; and (2) financial intermediation, in which the industry’s consolidation is ascribed to organizational innovations that mitigate transaction costs between external investors and ad agency owners. I then discuss the applicability of these two hypotheses to other professional services. The analysis suggests several new insights about the value of capital, the nature of demand, and the nature of assets in human capital intensive industries. 1
Keyphrases
global advertising industry industry structure human capital intensive industry professional service firm size industry consolidation client project financial intermediation advertising industry several professional service feature transaction cost size differentiation organizational innovation external investor ad agency owner human capital intensity qualitative evidence size distribution several new insight flimsy firm long-lived firm
