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The value relevance of brand valuation

Author

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  • Emanuel Bagna
  • Grazia Dicuonzo
  • Andrea Perrone
  • Vittorio Dell’Atti

Abstract

The reports published by independent parties are often used to provide an estimation of brands due to the lack of literature and best practices regarding which brand valuation method is more value relevant and reliable than another. Over the last several years, brand valuation debate is growing in importance because of the need to provide a value of intangibles for different purposes. The purpose of this study is two-fold. First, we aim to understand whether brand valuation related to listed companies provided by three independent agencies is value relevant and therefore whether these brand valuations are taken into consideration by investors in their decision-making process. Second, we assess which of the three methods reflects the stock markets in a better way. We analyse a sample of 71 brands valuated by Interbrand, Brand Finance and BrandZ from 2013 to 2015. The results show that brand valuation provided by the independent agencies is value relevant; in addition, they reveal that the Brand Finance method, based on the royalty relief approach, is more value relevant than the others. This study contributes to the extant literature on value relevance by providing evidence on the impact of stock prices of brand agencies’ valuation.

Suggested Citation

  • Emanuel Bagna & Grazia Dicuonzo & Andrea Perrone & Vittorio Dell’Atti, 2017. "The value relevance of brand valuation," Applied Economics, Taylor & Francis Journals, vol. 49(58), pages 5865-5876, December.
    • Handle: RePEc:taf:applec:v:49:y:2017:i:58:p:5865-5876
    DOI: 10.1080/00036846.2017.1352078
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    References listed on IDEAS

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    1. Yu-Yin Chang & Heng-Chiang Huang, 2021. "Exploring Patterns of Evolution for Successful Global Brands: A Data-Mining Approach," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    2. Maria Ángeles Alcaide González & Elena De La Poza Plaza & Natividad Guadalajara Olmeda, 2020. "The impact of corporate social responsibility transparency on the financial performance, brand value, and sustainability level of IT companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 642-654, March.
    3. Mohammad Aghaei, 2021. "Valuation of the Hamrah-e-Aval brand based on brand valuation models using Topsis multi-criteria decision-making model," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(1), pages 42-53, February.
    4. Orhan Emre Elma & Željko Stević & Mahmut Baydaş, 2024. "An Alternative Sensitivity Analysis for the Evaluation of MCDA Applications: The Significance of Brand Value in the Comparative Financial Performance Analysis of BIST High-End Companies," Mathematics, MDPI, vol. 12(4), pages 1-24, February.
    5. Emanuel Bagna, 2021. "Is There Any Value in the Banks Brand?," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(12), pages 261-261, July.
    6. María Ángeles Alcaide & Elena De La Poza & Natividad Guadalajara, 2019. "Assessing the Sustainability of High-Value Brands in the IT Sector," Sustainability, MDPI, vol. 11(6), pages 1-20, March.

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