The Market Value Impact of Brand Value Announcements

41 Pages Posted: 18 Aug 2010 Last revised: 2 Jul 2012

See all articles by Marie Dutordoir

Marie Dutordoir

University of Manchester - Manchester Business School

Frank Verbeeten

University of Amsterdam - Faculty of Economics and Business, Amsterdam Business School

Dominique De Beijer

affiliation not provided to SSRN

Date Written: July 2, 2012

Abstract

Despite widespread acknowledgment of the importance of branding, little is known about the magnitude and the determinants of the impact of brand value on brand owners’ market value. Our paper addresses this gap in the literature by conducting an event study on the effect of brand value announcements on the stock prices of brand-owning firms. Our sample consists of 329 brand value announcements derived from Interbrand’s Best Global Brands lists. We obtain evidence of significant abnormal stock returns on brand value announcement dates, with the magnitude of stock price reactions increasing in the magnitude of brand value changes. We also formulate and test hypotheses on the moderating impact of macroeconomic conditions and brand owner characteristics on the strength of the brand value – firm value relation. We find that stockholders place less weight on brand value information during economic downturns, and more weight on brand value information provided by firms for which intangible assets are a more important part of their asset structure. Furthermore, the results indicate that stockholders put a higher value on brand value changes realized by firms that spend less on advertising.

Keywords: Brand Value, Event Study, Information Disclosure, Intangible Assets

JEL Classification: G14, M37, M41

Suggested Citation

Dutordoir, Marie and Verbeeten, Frank H.M. and De Beijer, Dominique, The Market Value Impact of Brand Value Announcements (July 2, 2012). Available at SSRN: https://ssrn.com/abstract=1344523 or http://dx.doi.org/10.2139/ssrn.1344523

Marie Dutordoir (Contact Author)

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Frank H.M. Verbeeten

University of Amsterdam - Faculty of Economics and Business, Amsterdam Business School ( email )

Plantage Muidergracht 12
Amsterdam, 1018TV
Netherlands
(+31)0205257391 (Phone)

Dominique De Beijer

affiliation not provided to SSRN ( email )

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