The Impact of Brand Value Announcements on Firm Value

41 Pages Posted: 18 Feb 2009

See all articles by Dominique De Beijer

Dominique De Beijer

affiliation not provided to SSRN

M. G. Dekimpe

Catholic University of Leuven (KUL) - Department of Applied Economics; Erasmus Research Institute of Management (ERIM)

Marie Dutordoir

University of Manchester - Manchester Business School

F. H. M. Verbeeten

affiliation not provided to SSRN

Date Written: November 16, 2008

Abstract

U.S. firms are not required to report the values of internally-developed brands on their balance sheets. This paper tests whether brand value estimates provided by an external organism, i.e., the consultancy firm Interbrand, are value relevant. Unlike prior value relevance studies we use an event study analysis, which enables us to assess (i) whether brand value announcements have a causal impact on stock prices, (ii) what is the magnitude of the impact, and (iii) whether there are cross-sectional differences in the brand value impact. We document that stockholder reactions to brand value announcements are both statistically and economically significant. Stock prices are linearly increasing in the magnitude of the brand value change relative to the previous year's estimated value.

Keywords: Brand Value, Intangibles, Stockholder Wealth

JEL Classification: G14

Suggested Citation

De Beijer, Dominique and Dekimpe, Marnik and Dutordoir, Marie and Verbeeten, F.H.M., The Impact of Brand Value Announcements on Firm Value (November 16, 2008). Available at SSRN: https://ssrn.com/abstract=1344535 or http://dx.doi.org/10.2139/ssrn.1344535

Dominique De Beijer

affiliation not provided to SSRN ( email )

Marnik Dekimpe

Catholic University of Leuven (KUL) - Department of Applied Economics ( email )

Leuven, B-3000
Belgium
+32 16 326 957 (Phone)
+32 16 326 732 (Fax)

HOME PAGE: http://www.econ.kuleuven.ac.be/tew/academic/market/members/MarnikDekimpe.htm

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1715/9576 (Phone)
+31 10 408 9011 (Fax)

HOME PAGE: http://web.eur.nl/fbk/dep/dep3/about/members/people/mdekimpe

Marie Dutordoir (Contact Author)

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

F.H.M. Verbeeten

affiliation not provided to SSRN

No Address Available

Register to save articles to
your library

Register

Paper statistics

Downloads
452
Abstract Views
1,912
rank
63,950
PlumX Metrics