Evaluating the impact of brand equity on stock market valuation: A cross-industry analysis of global brands

Abstract

Brand equity is becoming increasingly significant in influencing corporate financial outcomes, particularly when it comes to stock market valuations. This research examines how brand equity affects stock market performance across different sectors, including technology, consumer goods, automotive, and healthcare. By analyzing data from leading global brands, the study assesses how various components of brand equitysuch as brand awareness, perceived quality, and customer loyaltyimpact stock prices and overall market capitalization. Through the use of regression analysis and other statistical methods, the study finds a strong positive relationship between robust brand equity and higher stock market valuations, especially in sectors like technology and consumer goods. On the other hand, industries like automotive show a weaker correlation, possibly due to greater market fluctuations and less customer loyalty. The results offer valuable insights for business leaders aiming to increase shareholder value through strategic brand development and for investors who wish to understand how intangible assets like brand equity can influence long-term financial outcomes. This research adds to the growing body of work on the financial impact of brand strength and lays the groundwork for future research on the subject.