Chasing the Fame: Investing on Brand Equity

Authors

Wei Feng, Lynn University
Robert W. Reich, Lynn University
Ye Sheng, Barry University

Document Type

Article

Publication Date

2017

DOI

https://doi.org/10.2139/ssrn.3860419

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.

Publication

Academy of Business Research Journal

Volume

4

Pages

7-19

Department

College of Business and Management

Peer Reviewed

1

Publication History

Date Written: September 1, 2017 Posted: 15 Jun 2021 Last revised: 17 Jun 2021

Recommended Citation

Feng, W., Reich, R. W., & Sheng, Y. (2017). Chasing the fame: Investing on brand equity. Academy of Business Research Journal, 4, 7-19. https://doi.org/10.2139/ssrn.3860419