Corporate Brand and Firm Value

Posted: 21 May 2007

See all articles by José Rosário

José Rosário

ISCTE

Claudia Custodio

Imperial College London; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Date Written: March 2007

Abstract

This study aims to find if a strong Corporate Brand contributes positively to the market value of the firm. The sample in use corresponds to 362 US companies from COMPUSTAT database that were also considered by Fortune in 2002 to construct the America's Most Admired Companies index. The results obtained provide empirical evidence supporting the main hypothesis of the study and are consistent with existing branding theory, that brand activities create shareholders value by increasing the future cash flows. The findings are robust after controlling for other variables that are known from financial theory to impact the firm value and also after correcting the Fortune index for what is known to be the financial halo effect, i.e. by removing the effect created by the past financial performance.

Keywords: corporate brand, brand, firm value, social responsibility, Fortune and America's Most Admired Companies

JEL Classification: G14, M31

Suggested Citation

Rosário, José and Custodio, Claudia, Corporate Brand and Firm Value (March 2007). Available at SSRN: https://ssrn.com/abstract=987581

José Rosário

ISCTE ( email )

Complexo Indeg/Iscte
Av. Professor Anibal Bettencourt
Lisboa, 1600-189
Portugal

Claudia Custodio

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
4,325
PlumX Metrics