Brand perception, cash flow stability, and financial policy

Larkin, Yelena

doi:10.1016/j.jfineco.2013.05.002

Cited by 117 publications

(79 citation statements)

References 54 publications

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“…It also has the value of precedent, having been used by other researchers who have shown that brand strength is positively related to customer lifetime value metrics (Stahl et al 2012), cost of debt (Larkin 2013), and firm performance (Mizik and Jacobson 2009). Samples of 1,200 or more consumers are selected each quarter from a panel of 15,000 people who are asked to complete a 45-minute survey once a year.…”

Section: Methods and Measuresmentioning

confidence: 99%

“…Focusing just on monobrands, however, would unduly reduce the sample size (Larkin 2013). Given the nature of these data, some previous authors have restricted their analysis to monobrand firms (e.g., Mizik and Jacobson 2009)-that is, firms for which a single brand represents the bulk of its business (e.g., America Online, IBM, Starbucks, Wal-Mart).…”

Section: Merging Bav and Compustat Datamentioning

confidence: 99%

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Employee-Based Brand Equity: Why Firms with Strong Brands Pay Their Executives Less

Tavassoli

Sorescu

Chandy

2014

Journal of Marketing Research

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This article examines the concept of employee-based brand equitythe value that a brand provides to a firm through its effects on the attitudes and behaviors of its employees-and empirically demonstrates its significance on executive pay. Executives value being associated with strong brands and, therefore, accept substantially lower pay at firms that own strong brands. Consistent with identity theory, this effect is stronger for chief executive officers and younger executives than for other executives. Data from a large, cross-industry sample of executives suggest that academics and practitioners should take a broader view of the contributions of brand-related investments to firm value and make use of strong brands in pay negotiations that are typically viewed as being outside the realm of marketing.

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Section: Methods and Measuresmentioning

confidence: 99%

Section: Merging Bav and Compustat Datamentioning

confidence: 99%

Employee-Based Brand Equity: Why Firms with Strong Brands Pay Their Executives Less

Tavassoli

Sorescu

Chandy

2014

Journal of Marketing Research

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“… Abstract Negative income shocks may cause lower consumption and a switch in consumption from brand to non‐brand products as consumers economize on price (Larkin ). This switch can also be the result of the vigorous promotion of private label products (Lamey et al ).…”

mentioning

confidence: 99%

“…For example, in North America the sales volume of top brand firm Coca‐Cola declined by only 1% in 2008 and 2% in 2009, while US Gross Domestic Product (GDP) per capita contracted by almost 5% and the unemployment rate spiked to 9.9%. (Larkin : 239–240). Hence, as a whole there is no clear prediction, nor conclusive evidence as to whether brand firms, compared with non‐brand firms, are more affected in times of crises.…”

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confidence: 99%

“…Lamey et al () study the same topic, but place more emphasize on the relationship between a firm's promotional conduct and the relative market share over the business cycle. Larkin () shows that brand loyalty and perception are positively related to leverage and credit ratings and negatively related to cash holdings and cash flow volatility. While it is not the main focus, Larkin () also examines change in performance during economic downturns.…”

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confidence: 99%

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Brand Firm Performance and Tough Economic Times

Chang

Young

2016

Int Rev Finance

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Negative income shocks may cause lower consumption and a switch in consumption from brand to non-brand products as consumers economize on price (Larkin 2013). This switch can also be the result of the vigorous promotion of private label products (Lamey et al. 2012). However, dedicated customers and conspicuous consumption (Veblen 1899; Berger and Ward 2010) can mitigate or even neutralize these effects on brand firms. Consistent with the notion that enduring consumption by brand customers has a stronger effect, we find that compared with non-brand firms, brand firms performed better in and recovered quicker from the difficult economic times of the late 2000s.We document that brand firms withstand crises better (suffer less and recover faster) than non-brand firms. These results do not appear to be driven by missing factors as confirmed by placebo tests, nor by observable characteristics as confirmed by various matching exercises.Is this result surprising? Brand products are commonly considered to be luxury goods. 1 Because consumption of luxury goods is procyclical (Lochstoer 2009), brand firms, compared with non-brand firms, should suffer more during periods of crisis. This is because if transitory income is lower during crises, the consumption of luxury goods, in contrast to necessity goods, should be lower. Furthermore, if permanent income also declines during crises, people will try to save more and hence purchase fewer luxury goods. Consistently, the literature has long suggested that the popularity of private labels, in relation to national brands, is countercyclical and negatively related to changes in disposable income

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Does brand capital improve stock liquidity? Evidence from China

Majeed,

Ullah,

Tariq

et al. 2023

Int. J Fin Econ

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This study investigates how brand capital affects stock market liquidity. We posit that brand capital improves the corporate information environment, enhances competitiveness, and increases firm visibility ultimately resulting in higher stock liquidity. Using a sample of Chinese listed firms, we find a positive relationship between brand capital and stock liquidity. Further analyses show that the effect of brand capital is more pronounced for firms with low media coverage and analyst following. Moreover, the effect of brand capital on stock liquidity is significant for non‐state‐owned enterprises. Our mechanism analyses also confirm that brand capital plays an informational role by effectively mitigating information asymmetry and adverse selection, leading to higher stock liquidity. Our study provides the first evidence of the nexus between brand capital and stock liquidity and extends the literature on the capital market implications of brand capital.

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Brand perception, cash flow stability, and financial policy

Cited by 117 publications

References 54 publications

Employee-Based Brand Equity: Why Firms with Strong Brands Pay Their Executives Less

Employee-Based Brand Equity: Why Firms with Strong Brands Pay Their Executives Less

Brand Firm Performance and Tough Economic Times

Does brand capital improve stock liquidity? Evidence from China

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