Exploring the brand value shareholder value nexus for consumer goods companies

It is generally claimed that brand names are a corporate asset with an economic value that creates wealth for a firm's shareholders. However the scholarly literature has neither provided a comprehensive theoretical basis for this claim nor documented an empirical relationship between brand value and shareholder value. This exploratory study describes a rationale for and documents, the statistical strength and functional form of a brand value-shareholder value relationship for publicly held consumer goods companies in the United States. A theoretical argument supportive of a positive relationship between a firm's accumulated brand value and market-to-book (M/B) ratio was empirically validated. However even though firms with higher accumulated brand values have higher M/B ratios, the functional form of the relationship was found to be concave with decreasing returns to scale. Theoretical and managerial implications of these findings are out-lined, as well as study limitations and directions for future research.