Chasing the Fame: Investing in Brand Equity

Academy of Business Research Journal, Vol IV, 2017

13 Pages Posted: 15 Jun 2021 Last revised: 18 Jun 2021

See all articles by Wei Feng

Wei Feng

Lynn University

Robert W. Reich

Tarleton State University; Academy of Business Research; International Organization of Social Science and Behavioral Research

Shirley Sheng

Barry University

Date Written: September 1, 2017

Abstract

This paper examines the relationship between a firm’s brand equity and its investment value. “Brand equity is defined as the incremental cash flows which accrue to branded products over unbranded products. The estimation technique extracts the value of brand equity from the value of the firm's other assets” (Simon & Sullivan, 1993). This study illustrates how stocks with higher growth of brand equity provide stronger investment value. Conversely, stocks with deteriorating brand equity generally feature lower return potential. An empirical portfolio-strategy is used to demonstrate the assumptions and predicts how to capitalize upon return potential from such a relationship.

Keywords: Brand Equity, Investment, Portfolio, Equity Markets

JEL Classification: G11, M21, M30

Suggested Citation

Feng, Wei and Reich, Robert Weichel and Sheng, Ye, Chasing the Fame: Investing in Brand Equity (September 1, 2017). Academy of Business Research Journal, Vol IV, 2017, Available at SSRN: https://ssrn.com/abstract=3860419 or http://dx.doi.org/10.2139/ssrn.3860419

Wei Feng (Contact Author)

Lynn University ( email )

Boca Raton, FL
United States

Robert Weichel Reich

Tarleton State University ( email )

Stephenville, TX 76402
United States
865 405 2584 (Phone)

Academy of Business Research ( email )

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International Organization of Social Science and Behavioral Research ( email )

MS
United States

Ye Sheng

Barry University ( email )

11300 Northeast Second Avenue
Miami Shores, FL 33161-6695
United States

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