Brand capital and rent sharing: Evidence from firm-level data

Sudong Hua

Economics Letters, 2025, vol. 255, issue C

Abstract: Brand capital is widely recognized for its role in enhancing firm value and profitability, but its impact on firms’ incentives to improve workers’ welfare remains unclear. We observe considerable variation in advertising intensity within and across sectors, highlighting its influence on firm-labor dynamics. This study investigates how the accumulation of brand capital affects a firm’s willingness to share rents with workers. Our findings suggest that, on average, higher brand capital enhances this willingness, particularly among service-oriented firms, older firms, firms based in large cities, and during economic downturns. However, workers benefit from more aggressive advertising investment only when a firm’s distributional policy generates a positive elasticity of willingness to share. Irrespective of distributional policy, brand capital amplifies between-firm wage inequality.

Keywords: Brand capital; Rent sharing; Firm characteristics (search for similar items in EconPapers)
JEL-codes: E22 J31 L11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003106

DOI: 10.1016/j.econlet.2025.112473

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