Brand value and shareholder value : evidence from european NYSE Euronext firms

Laúdo, Cátia Filipa Caetano

http://hdl.handle.net/10400.8/1404

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Authors

Laúdo, Cátia Filipa Caetano

Advisor(s)

Canadas, Natália Maria Prudêncio Rafael

Silva, Maria João da Silva

Abstract(s)

Do strong brands create shareholder value? Since the recognition of the economic value of brands, several empirical studies have attempted to answer this question. The present dissertation examines the effects that European strong brands, as estimated by one of the world’s leading brand consultancy firms (Interbrand), and whose firms are listed on the NYSE Euronext stock exchange, have on shareholder value creation for the period from July 2007 to June 2013. Specifically, we compare the performance of a portfolio of firms that owned valuable brands, with two benchmark portfolios, making use of the Fama-French’s three-factor model plus a momentum factor, to adjust returns for risk. As a result, we find statistically significant evidence that the portfolio of firms with valuable brands outperformed both benchmark portfolios not only with higher returns, but also with lower risk, increasing, this way, shareholder value.