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Brand Equity and Shareholder Value

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  • Pahud de Mortanges, Charles
  • van Riel, Allard

Abstract

It is often assumed that brands represent an asset, as well as a source of current and future earnings and cash flows for a firm. As such, the value of the brand, or brand equity, should manifest itself in the market value of the firm and thus have an impact on shareholder value. Yet, almost no research exists that has empirically investigated this relationship between brand value and shareholder value. In the present study, brand equity is measured for 43 Dutch corporate brands using the Brand Asset Valuator® for the years 1993 and 1997. Directional changes within the BAV Power Grid, measuring Brand Strength and Brand Stature, are statistically compared with directional changes in shareholder value between 1993 and 1997. Three different measures for determining shareholder value are used: Total Shareholder Return, Earnings per Share, and the Market-to-Book ratio. Various indications are found that confirm the expected relationships, but a clear need is observed to develop reliable and valid indicators for shareholder value. Some managerial implications, limitations of the study and directions for future research are discussed.

Suggested Citation

  • Pahud de Mortanges, Charles & van Riel, Allard, 2003. "Brand Equity and Shareholder Value," European Management Journal, Elsevier, vol. 21(4), pages 521-527, August.
    • Handle: RePEc:eee:eurman:v:21:y:2003:i:4:p:521-527
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    Citations

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    Cited by:

    1. Anselmsson, Johan & Bondesson, Niklas, 2015. "Brand value chain in practise; the relationship between mindset and market performance metrics: A study of the Swedish market for FMCG," Journal of Retailing and Consumer Services, Elsevier, vol. 25(C), pages 58-70.
    2. repec:dau:papers:123456789/5893 is not listed on IDEAS
    3. Kui Wang & Wei Jiang, 2019. "Brand Equity and Firm Sustainable Performance: The Mediating Role of Analysts’ Recommendations," Sustainability, MDPI, vol. 11(4), pages 1-24, February.
    4. Anne-Laure Farjaudon & Leyla Jaoued-Abassi, 2010. "Marketing brand value and financial brand value: towards an integrative model? [Valeur marketing et valeur financière de la marque : Vers un modèle intégrateur]," Post-Print hal-01128462, HAL.
    5. Asli D. A. Tasci, 2020. "Exploring the analytics for linking consumer-based brand equity (CBBE) and financial-based brand equity (FBBE) of destination or place brands," Place Branding and Public Diplomacy, Palgrave Macmillan, vol. 16(1), pages 36-59, March.
    6. Ming Li & Chee Hua Chin & Shangke Li & Winnie Poh Ming Wong & Jun Zhou Thong & Kang Gao, 2022. "The Role of Influencing Factors on Brand Equity and Firm Performance with Innovation Culture as a Moderator: A Study on Art Education Firms in China," Sustainability, MDPI, vol. 15(1), pages 1-18, December.
    7. Anupam Singh & Priyanka Verma, 2017. "How CSR Affects Brand Equity of Indian Firms?," Global Business Review, International Management Institute, vol. 18(3_suppl), pages 52-69, June.
    8. Natalia Rubio & Nieves Villaseñor & Mª Jesús Yagüe, 2021. "Influence of Value Co-Creation on Virtual Community Brand Equity for Unichannel vs. Multichannel Users," Sustainability, MDPI, vol. 13(15), pages 1-16, July.
    9. Tsuen-Ho Hsu & Li-Chu Hung & Jia-Wei Tang, 2012. "An analytical model for building brand equity in hospitality firms," Annals of Operations Research, Springer, vol. 195(1), pages 355-378, May.
    10. Pandey, Arpita & Sharma, Dheeraj, 2016. "Antecedents and consequences of Brand Equity: A meta-analysis," IIMA Working Papers WP2016-03-46, Indian Institute of Management Ahmedabad, Research and Publication Department.
    11. Pinar Basgoze & Yilmaz Yildiz & Selin Metin Camgoz, 2016. "Effect of brand value announcements on stock returns: empirical evidence from Turkey," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 17(6), pages 1252-1269, November.
    12. Srikanth Potharla & Surya Kumari Turubilli & Mylavaram Chandra Shekar, 2024. "The Social Pillar of ESG: Exploring the Link Between Social Sustainability and Stock Price Synchronicity," Indian Journal of Corporate Governance, , vol. 17(1), pages 130-152, June.

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