The dynamic relationship between investments in brand equity and firm profitability: Evidence using trademark registrations

Dirk Crass, Dirk Czarnitzki and Andrew A Toole

No 526330, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: Most marketing practitioners and scholars agree that marketing assets such as brand equity significantly contribute to a firm’s financial performance. In this paper, we model brand equity as an unobservable stock that results from up to thirty years of past brand-related investment flows. Using firm-specific trademarks as investment proxies, our results show a significant long-run impact on financial performance. The dynamic profile of brand-related investments has an inverted-U shape that reaches its peak after eleven years. On average, it takes four years before brand related investments show a positive return, and investments older than nineteen years show no significant impact. For the median trademarking firm, brand equity contributes 265,000 Euro to annual profits.

Keywords: Brand Equity; Firm Profitability; Intellectual Property Rights; Trademarks (search for similar items in EconPapers)
Date: 2016-01
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Citations: View citations in EconPapers (5)

Published in FEB Research Report - MSI_1602

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https://lirias.kuleuven.be/retrieve/363445 Accepted version (application/pdf)

Related works:
Journal Article: The Dynamic Relationship Between Investments in Brand Equity and Firm Profitability: Evidence Using Trademark Registrations (2019)
Journal Article: The Dynamic Relationship Between Investments in Brand Equity and Firm Profitability: Evidence Using Trademark Registrations (2019)
Working Paper: The dynamic relationship between investments in brand equity and firm profitability: Evidence using trademark registrations (2016)
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