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Brand Equity and Firm Risk: An Empirical Investigation in an Emerging Market

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  • Yilmaz Yildiz
  • Selin Metin Camgoz

Abstract

The aim of this article is to investigate the relationship between brand equity and firm risk in Turkey using a sample of 254 firm-year observations for the period 2009–2014. Our findings suggest that brand equity is an important determinant of equity risk in addition to conventional firm-specific variables. In particular, after controlling for firm-specific variables, the results reveal that firms with high brand equity experience lower volatility in stock returns. We also find that enhancing brand equity is an important tool for firms in reducing unsystematic and downside systematic risk in their stock prices. Our findings are robust to different valuation models of domestic and global investors as well as different methods of estimations. The results are encouraging for both marketing managers and investors, particularly those in emerging markets where stock price volatility is relatively higher than in developed markets.

Suggested Citation

  • Yilmaz Yildiz & Selin Metin Camgoz, 2019. "Brand Equity and Firm Risk: An Empirical Investigation in an Emerging Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(1), pages 218-235, January.
    • Handle: RePEc:mes:emfitr:v:55:y:2019:i:1:p:218-235
    DOI: 10.1080/1540496X.2018.1429904
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    Cited by:

    1. 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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