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Brand Equity and Firm Sustainable Performance: The Mediating Role of Analysts’ Recommendations

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  • Kui Wang

    (Department of Marketing, Xiamen University, Xiamen 361005, China)

  • Wei Jiang

    (Department of Marketing, Xiamen University, Xiamen 361005, China)

Abstract

Current literature has overlooked the signaling effects of the brand on a firm’s sustainable performance through financial analysts. This study posits that financial analysts may serve as the information bridge connecting brand equity and a firm’s sustainable performance by providing professional recommendations of stock investments to public investors. Using a longitudinal archived dataset of Chinese listed firms, we found that: (1) brand equity improves the level of analysts’ recommendations for a focal firm’s stock, and also reduces the inconsistency of analysts’ recommendations; (2) industrial competition further strengthens the positive impact of brand equity on analysts’ recommendation level and strengthen its negative impact on recommendation inconsistency; (3) analyst recommendations mediate the relationship between brand equity and a firm’s sustainable performance in terms of abnormal return, systematic and idiosyncratic risk. These findings emphasize the importance of financial analysts’ recommendations in influencing the value of brand equity on sustainable firm performance.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:4:p:1086-:d:207227
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    Cited by:

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    2. Chune Young Chung & Euisup Lee & Chang-Gyun Park, 2020. "Do Ownership Ties Increase the Optimistic Bias of Analysts’ Earnings Estimates? Evidence from Corporate Financing in the Korean Market," Sustainability, MDPI, vol. 12(11), pages 1-20, June.
    3. S. Mythreyi Koppur & Dr. B. Senthilkumar, 2021. "Estimation of Odds Ratio as a Quality Indicator on Investment Recommendations - A Bayesian Approach," Journal of Commerce and Trade, Society for Advanced Management Studies, vol. 16(1), pages 22-30, April.
    4. Keshab Ray & Meenakshi Sharma, 2021. "Antecedents and Outcomes of Brand Strength: A Study of Asian IT Organizations Towards Brand Sustainability," Corporate Reputation Review, Palgrave Macmillan, vol. 24(3), pages 128-142, August.
    5. Camelia-Daniela Hategan & Ruxandra-Ioana Pitorac & Vasile-Petru Hategan & Carmen Mihaela Imbrescu, 2021. "Opportunities and Challenges of Companies from the Romanian E-Commerce Market for Sustainable Competitiveness," Sustainability, MDPI, vol. 13(23), pages 1-15, December.
    6. Musaab Mousa & Judit Sági & Zoltán Zéman, 2021. "Brand and Firm Value: Evidence from Arab Emerging Markets," Economies, MDPI, vol. 9(1), pages 1-13, January.
    7. Zhaoyang Guo & Siyu Hou & Qingchang Li, 2020. "Corporate Social Responsibility and Firm Value: The Moderating Effects of Financial Flexibility and R&D Investment," Sustainability, MDPI, vol. 12(20), pages 1-17, October.
    8. Linyan Fan & Sheng Yao, 2022. "Analyst Site Visits and Corporate Environmental Information Disclosure: Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-21, December.
    9. Kyoungwon Mo & Kyung Yun (Kailey) Lee, 2019. "Analyst Following, Group Affiliation, and Labor Investment Efficiency: Evidence from Korea," Sustainability, MDPI, vol. 11(11), pages 1-19, June.
    10. Abdulsamad Alazzani & Wan Nordin Wan-Hussin & Michael Jones & Ahmed Al-hadi, 2021. "ESG Reporting and Analysts’ Recommendations in GCC: The Moderation Role of Royal Family Directors," JRFM, MDPI, vol. 14(2), pages 1-21, February.

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