Brand Equity and Shareholder Value

C.F.W. Pahud de Mortanges, A.C.R. van Riel

Research output: Contribution to journalArticleAcademicpeer-review


It is often assumed that brands represent an asset, as well as a source of current and future earnings and cash flows for a firm. As such, the value of the brand, or brand equity, should manifest itself in the market value of the firm and thus have an impact on shareholder value. Yet, almost no research exists that has empirically investigated this relationship between brand value and shareholder value. In the present study, brand equity is measured for 43 dutch corporate brands using the brand asset valuator® for the years 1993 and 1997. Directional changes within the bav power grid, measuring brand strength and brand stature, are statistically compared with directional changes in shareholder value between 1993 and 1997. Three different measures for determining shareholder value are used: total shareholder return, earnings per share, and the market-to-book ratio. Various indications are found that confirm the expected relationships, but a clear need is observed to develop reliable and valid indicators for shareholder value. Some managerial implications, limitations of the study and directions for future research are discussed.
Original languageEnglish
Pages (from-to)521-527
JournalEuropean Management Journal
Issue number4
Publication statusPublished - 1 Jan 2003


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