An Empirical Study for Measuring the Brand Equity: A Financial Approach

Abstract

The importance of intangible assets regarded as the corporate assets has been increasing in recent years. We estimate a corporate brand equity that is one of the corporate intangible assets for the firms in the Japanese manufacturing industry. There are some models for estimating a corporate brand equity. The model of Simon and Sullivan (1993) is superior to other models in terms of economic adequacy, objectivity, and comparability because their model is based on the market value of the firm's securities and can estimate the corporate brand value by the use of statistical methods. We employ their model for estimating the brand equity of the firms listed on the 1st and 2nd Section of the Tokyo Stock Exchange during the 12 years from 1990 to 2001. The result of the empirical study reveals that advertisement is very effective for raising the corporate brand equity. In addition, it turns out that advertisement as well as research and development expenditure are effective for raising market share and stock price.