Brand Names: Measurement and Valuation

57 Pages Posted: 8 Jul 2022 Last revised: 19 Dec 2023

Date Written: June 26, 2022

Abstract

We highlight limitations of using the input measure of brand value (i.e., cumulative advertising expenses) when studying brand name companies. Using Interbrands’ data as well as a novel text-based measure of brand value, we find that an equal-weighted portfolio of best brands earns a yearly abnormal return of 3%. Intangible factors proposed in the literature have no explanatory power for the premium. The excess returns are driven by companies that develop their brands internally and analysts underestimate future earnings of brand names in their forecasts. We find no abnormal returns associated with the input measure of brand value.

Keywords: Brand value, intangible assets, excess returns, undervaluation, Textual analysis

JEL Classification: G01, G11, G14

Suggested Citation

Boustanifar, Hamid and Kang, Young Dae, Brand Names: Measurement and Valuation (June 26, 2022). Available at SSRN: https://ssrn.com/abstract=4146667 or http://dx.doi.org/10.2139/ssrn.4146667

Hamid Boustanifar (Contact Author)

EDHEC Business School ( email )

393 Promenade des Anglais – BP 3116
Nice, 06202
France

Young Dae Kang

The Bank of Korea ( email )

Korea, Republic of (South Korea)

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