EFFECTS OF BRAND VALUE ON STOCK RETURN IN INDONESIA
DOI:
https://doi.org/10.35794/jmbi.v10i2.44462Abstract
Abstract. We study the relationship between brand value and stock return in Indonesian market, using brand value published in annual reports by Brand Finance between 2014-2020. Using the capital asset pricing model (CAPM) and Fama-French plus momentum factor, we find that brand value does not have positive effects on stock returns. Portfolio of stocks with higher brand value does not yield higher return and lower risk compared to benchmark portfolio. Further analysis also shows that brand values published by Brand Finance are not fully reflected in Indonesian market.
Abstrak. Kami mempelajari hubungan antara nilai merek dan pengembalian saham di pasar Indonesia, dengan menggunakan nilai merek yang diterbitkan dalam laporan tahunan oleh Brand Finance antara 2014-2020. Dengan menggunakan model penetapan harga aset modal (CAPM) dan faktor Fama-French plus momentum, kami menemukan bahwa nilai merek tidak berpengaruh positif terhadap return saham. Portofolio saham dengan brand value yang lebih tinggi tidak menghasilkan return yang lebih tinggi dan risiko yang lebih rendah dibandingkan portofolio benchmark. Analisis lebih lanjut juga menunjukkan bahwa brand value yang diterbitkan oleh Brand Finance tidak sepenuhnya tercermin di pasar Indonesia
References
Aaker, D. A. (1991). Managing Brand Equity: Capitalizing on the Value of a Brand Name. Free Press.
Aaker, D. A., & Jacobson, R. (1994). The Financial Information Content of Perceived Quality. Journal of Marketing Research, XXXI, 191–201.
Alamsyah, F., & Madyan, M. (2021). Pengaruh Board Characteristics Proporsi Woman On Board Pada Kinerja Keuangan. JMBI UNSRAT (Jurnal Ilmiah Manajemen Bisnis Dan Inovasi Universitas Sam Ratulangi)., 8(2). https://doi.org/10.35794/jmbi.v8i2.34663
Alamsyah, F., Saerang, I.S., Tulung, J. E. (2019). Analisis Akurasi Model Zmijewski, Springate, Altman, dan Grover Dalam Memprediksi Financial Distress. Jurnal EMBA : Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi 7(2). https://doi.org/10.35794/emba.v7i2.49101
Anderson, J. (2007). Brand Equity: The Perpetuity Perspective. American Marketing Association.
Bank, S., Yazar, E. E., & Sivri, U. (2020). The portfolios with strong brand value: More returns? Lower risk? Borsa Istanbul Review, 20(1), 64–79. https://doi.org/10.1016/j.bir.2019.09.001
Barth, M. E., Clement, M. B., Foster, G., & Kasznik, R. (1998). Brand Values and Capital Market Valuation. In Review of Accounting Studies (Vol. 3).
Basgoze, P., Yildiz, Y., & Metin Camgoz, S. (2016). Effect of brand value announcements on stock returns: empirical evidence from Turkey. Journal of Business Economics and Management, 17(6), 1252–1269. https://doi.org/10.3846/16111699.2016.1153517
Bayrakdaroğlu, A., & Mirgen, Ç. (2016). Marka Değerinin Hisse Senedi Getirisi Üzerine Etkisi: BİST de Bir Araştırma. Business and Economics Research Journal, 7(3), 111–111. https://doi.org/10.20409/berj.2016321811
Belo, F., Vitorino, M. A., Lin, X., Goldstein, R., Nieuwerburgh, V., Roussanov, N., Yu, J., & Zhang, L. (2013). Charles A. Dice Center for Research in Financial Economics Brand Capital and Firm Value Brand Capital and Firm Value *. http://ssrn.com/abstract=1805124http://www.ssrn.com
Carhart, M. M. (1997). On persistence in mutual fund performance. Journal of Finance, 52(1), 57–82. https://doi.org/10.1111/j.1540-6261.1997.tb03808.x
Conchar, M. P., Crask, M. R., & Zinkhan, G. M. (2005). Market valuation models of the effect of advertising and promotional spending: A review and meta-analysis. Journal of the Academy of Marketing Science, 33(4), 445–460. https://doi.org/10.1177/0092070305277693
Crass, D., Czarnitzki, D., & Toole, A. A. (2019). The Dynamic Relationship Between Investments in Brand Equity and Firm Profitability: Evidence Using Trademark Registrations. International Journal of the Economics of Business, 26(1), 157–176. https://doi.org/10.1080/13571516.2019.1553292
Fama, E. F., & French, K. R. (2003). The CAPM: Theory and Evidence. http:/ssrn.com/abstract=440920
Fama, E. F., & French, K. R. (2004). Fama French 2004 - The Capital Asset Pricing Model...Theory and Evidence.
Farquhar, P. H. (1989). Managing Brand Equity. Marketing Research, 1, 24–33.
Fehle, F., Fournier, S. M., Thomas, ;, Madden, J., David, ;, & Shrider, G. (2008). Brand Value and Asset Pricing. In Quarterly Journal of Finance and Accounting; Winter (Vol. 47).
Feldwick, P. (1996). Do we really need ‘Brand Equity’? Journal of Brand Management, 4(1), 9–28. https://doi.org/10.1057/bm.1996.23
Fischer, M., & Himme, A. (2017). The financial brand value chain: How brand investments contribute to the financial health of firms. International Journal of Research in Marketing, 34(1), 137–153. https://doi.org/10.1016/j.ijresmar.2016.05.004
Hsu, F. J., Tsai, Y. W., & Chen, M. Y. (2013). The Impact of Brand Value on Financial Performance. In Advances in Management & Applied Economics (Vol. 3, Issue 6). online) Scienpress Ltd.
Jegadeesh, N., & Titman, S. (1993). Returns to Buying Winners and Selling Losers: Implications for Stock Market Efficiency. The Journal of Finance, 48(1), 65–91. http://www.jstor.orgURL:http://www.jstor.org/stable/2328882http://www.jstor.org/stable/2328882?seq=1&cid=pdf-reference#references_tab_contents
Karamoy, H., & Tulung, J. E. (2020). The Effect of Banking Risk on Indonesian Regional Development Bank. Banks and Bank Systems, 15(2), 130-137
Karamoy, H., & Tulung, J. E. (2020). The Effect of Financial Performance and Corporate Governance To Stock Price In Non-Bank Financial Industry. Corporate Ownership & Control, 17(2), 97-103.
Keller, K. L. (1993). Conceptualizing, Measuring, and Managing Customer-Based Brand Equity. Jounal of Marketing, 57, 1–22.
Keller, K. L., & Lehmann, D. R. (2006). Brands and branding: Research findings and future priorities. Marketing Science, 25(6), 740–759. https://doi.org/10.1287/mksc.1050.0153
Kerin, R. A., & Sethuraman, R. (1998). Exploring the Brand Value-Shareholder Value Nexus for Consumer Goods Companies.
Kim, H. B., Kim, W. G., & An, J. A. (2003). The effect of consumer-based brand equity on firms’ financial performance. Journal of Consumer Marketing, 20(4–5), 335–351. https://doi.org/10.1108/07363760310483694
Kirk, C. P., Ray, I., & Wilson, B. (2013). The impact of brand value on firm valuation: The moderating influence of firm type. Journal of Brand Management, 20(6), 488–500. https://doi.org/10.1057/bm.2012.55
Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.).
Krasnikov, A., Mishra, S., & Orozco, D. (2009). Evaluating the Financial Impact of Branding Using Trademarks: A Framework and Empirical Evidence. Journal of Marketing, 73, 154–166.
Lane, V., & Jacobson, R. (1995). Stock Market Reactions to Brand Extension Announcements: The Effects of Brand Attitude and Familiarity. In Source: Journal of Marketing (Vol. 59, Issue 1). http://www.jstor.orgURL:http://www.jstor.org/stable/1252015
Madden, T. J., Fehle, F., & Fournier, S. (2006). Brands matter: An empirical demonstration of the creation of shareholder value through branding. Journal of the Academy of Marketing Science, 34(2), 224–235. https://doi.org/10.1177/0092070305283356
Mizik, N., & Jacobson, R. (2008). The Financial Value Impact of Perceptual Brand Attributes. Journal of Marketing Research, XLV, 15. www.yrbav.com.
Mojambo, G. A., Tulung, J. E., & Saerang, R. T. (2020). The Influence of Top Management Team (TMT) Characteristics Toward Indonesian Banks Financial Performance During the Digital Era (2014-2018). JMBI UNSRAT (Jurnal Ilmiah Manajemen Bisnis dan Inovasi Universitas Sam Ratulangi)., 7(1).
Simon, C. J., & Sullivan, M. W. (1993). Marketing Science (1986-1998). In Winter (Vol. 12).
Srivastava, R. K., Shervani, T. A., & Fahey, L. (1998). Market-Based Assets and Shareholder Value: A Framework for Analysis. In Source: Journal of Marketing (Vol. 62, Issue 1).
Wood, L. (2000). Brands and brand equity: definition and management. Management Decision, 38(9), 662–669. https://doi.org/10.1108/00251740010379100
