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The Impact of Corporate Rebranding on the Firm's Market Value

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  • Maria Rosa Borges
  • Ana Sofia Branca

Abstract

Rebranding corresponds to the creation of a new name, term, symbol, design or a combination of them for an established brand with the intention of developing a differentiated position in the mind of stakeholders and competitors. Increased competition has led firms to an avenue of differentiation, and rebranding has been approached by firms in order to differentiate themselves and to promote the corporate image. Corporate rebranding, although commonly referred in the press, has received little attention from academia. This paper tends to contribute to fill this gap in the academic literature, by analysing the impact that corporate image through rebranding has on the firms' stock market value, using event study methodologies. We focus on firms listed on the Lisbon Stock Market in the period 2000 - February 2009. We do not find evidence of a positive impact of corporate rebranding on firm value, in Portuguese firms. In fact, our results suggest that these events may have a negative impact on firm value, even though our empirical evidence is weak, in supporting this conclusion.

Suggested Citation

  • Maria Rosa Borges & Ana Sofia Branca, 2010. "The Impact of Corporate Rebranding on the Firm's Market Value," Working Papers Department of Economics 2010/13, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
  • Handle: RePEc:ise:isegwp:wp132010
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    More about this item

    Keywords

    corporate image; rebranding; market value; event study;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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