Brand Perceptions and the Market for Common Stock, forthcoming, Journal of Financial and Quantitative

Laura Frieder and Avanidhar Subrahmanyam

University of California at Los Angeles, Anderson Graduate School of Management from Anderson Graduate School of Management, UCLA

Abstract: This paper investigates the effect of company brand perceptions on investor incentives to hold stocks. We find that, after controlling for other postulated determinants of stockholdings, there is a negative and significant cross-sectional relation between percentage institutional holdings and brand visibility. This finding indicates a propensity for individual investors to hold stocks with strong brand recognition, which is consistent with the hypothesis that individuals prefer to invest in companies whose products are readily recognized. Furthermore, we find that institutional holdings are positively related to firm size and beta, while being negatively related to total return volatility. Our analysis supports the notion that institutional portfolios eschew the relatively neglected sector characterized by small firms with high total volatility, whereas individual investors prefer holding stocks with low systematic risk and high recognition. The results contribute to our understanding of how financial market investors form their equity portfolios.

Date: 2001-06-29
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.escholarship.org/uc/item/2kt3g862.pdf;origin=repeccitec (application/pdf)

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:cdl:anderf:qt2kt3g862

Access Statistics for this paper

More papers in University of California at Los Angeles, Anderson Graduate School of Management from Anderson Graduate School of Management, UCLA Contact information at EDIRC.
Bibliographic data for series maintained by Lisa Schiff ().