Brand Equity and Firm Sustainable Performance: The Mediating Role of Analysts’ Recommendations

Kui Wang and Wei Jiang
Additional contact information
Kui Wang: Department of Marketing, Xiamen University, Xiamen 361005, China
Wei Jiang: Department of Marketing, Xiamen University, Xiamen 361005, China

Sustainability, 2019, vol. 11, issue 4, 1-24

Abstract: Current literature has overlooked the signaling effects of the brand on a firm’s sustainable performance through financial analysts. This study posits that financial analysts may serve as the information bridge connecting brand equity and a firm’s sustainable performance by providing professional recommendations of stock investments to public investors. Using a longitudinal archived dataset of Chinese listed firms, we found that: (1) brand equity improves the level of analysts’ recommendations for a focal firm’s stock, and also reduces the inconsistency of analysts’ recommendations; (2) industrial competition further strengthens the positive impact of brand equity on analysts’ recommendation level and strengthen its negative impact on recommendation inconsistency; (3) analyst recommendations mediate the relationship between brand equity and a firm’s sustainable performance in terms of abnormal return, systematic and idiosyncratic risk. These findings emphasize the importance of financial analysts’ recommendations in influencing the value of brand equity on sustainable firm performance.

Keywords: brand equity; firm sustainable performance; signaling theory; analysts’ recommendation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/4/1086/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/4/1086/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:4:p:1086-:d:207227

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().