Relationship between corporate brand and ROE in industrial markets

Abstract

The importance and necessity of investment in intangible asset value of companies, including ESG investment, has been increasing in recent years. Corporate brands are an important element of intangible assets. However, especially in B2B companies, there are many unclear points regarding the relationship between corporate brand value and business performance. In this study, we quantitatively evaluated the relationship between B2B corporate brands and performance using a new large-scale corporate brand survey index created from a business card exchange network. We examined the relationship between the corporate brand index and ROE for B2B companies. As a result, we found that companies with a high corporate brand index had a significantly higher profit margin, a significantly lower turnover rate and no significant association with financial leverage. These results show that even in B2B companies, companies with high corporate brands have implemented a differentiation strategy that allows a high margin range, while companies with low brands have adopted cost leadership strategies with high turnover rate.