EXPLORING THE BRAND VALUE SHAREHOLDER VALUE NEXUS FOR CONSUMER-GOODS COMPANIES

It is generally claimed that brand names are a corporate asset with an economic value that creates wealth for a firm's shareholders. However the scholarly literature has neither provided a comprehensive theoret ical basis for this claim nor documented an empirical relationship bet ween brand value and shareholder value. This exploratory study describ es a rationale for and documents, the statistical strength and functio nal form of a brand value-shareholder value relationship for publicly held consumer goods companies in the United States. A theoretical argu ment supportive of a positive relationship between a firm's accumulate d brand value and market-to-book (M/B) ratio was empirically validated . However even though firms with higher accumulated brand values have higher M/B ratios, the functional form of the relationship was found t o be concave with decreasing returns to scale. Theoretical and manager ial implications of these findings are out-lined, as well as study lim itations and directions for future research.