Skip to main content
SpringerLink
Log in

The value relevance of brand equity in the financial services industry: an empirical analysis using quantile regression

  • Original Article
  • Published:
Service Business Aims and scope Submit manuscript

Abstract

The purpose of this article is twofold. First, it attempts to explore the factors contributing to the brand values of Taiwan’s financial service companies. Second, it aims to examine the value relevance of their brand equity. Our empirical findings from OLS regression show that advertising expenditure in banking firms have positive significant effects on brand evaluation and that the brand equity of banking firms is positively related to their market value. The general findings remain valid when we apply conditional quantile regressions to re-examine these relationships. Moreover, the quantile estimates indicate that the factor of brand loyalty could bring benefits to the banks with lower levels of brand equity. However, brands do not offer insights into the banks that have extremely low market capitalization.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Aaker DA (1991) Managing brand equity: capitalizing on the value of a brand name. The Free Press, New York

    Google Scholar 

  • Aaker DA (1996) Building strong brands. The Free Press, New York

    Google Scholar 

  • Aaker DA (1997) Dimensions of brand personality. J Market Res 34(3):347–356

    Article  Google Scholar 

  • Aaker DA, Jacobson R (1994) The financial information content of perceived quality. J Market Res 31(2):191–201

    Article  Google Scholar 

  • Ackerberg DA (2001) Empirically distinguishing informative and prestige effects of advertising. RAND J Econ 32(2):316–333

    Article  Google Scholar 

  • Ailawadi KL, Lehmann DR, Neslin SA (2003) Revenue premium as an outcome measure of brand equity. J Market 67(4):1–17

    Article  Google Scholar 

  • Ambler T (2000) Marketing and the bottom line. FT Prentice Hall, London

    Google Scholar 

  • Ambler T (2003) Marketing and the bottom line, 2nd edn. FT Prentice Hall, London

    Google Scholar 

  • Ballow JJ, Burgman R, Molnar MJ (2004) Managing for shareholder value: intangibles, future value and investment decisions. J Bus Strategy 25(3):26–34

    Article  Google Scholar 

  • Barth M, Clement M, Foster G, Kasznik R (1998) Brand values and capital market valuation. Rev Acc Stud 3(1–2):41–68

    Article  Google Scholar 

  • Benrud E (2004) Competition between low and high quality products in the financial service market. J Finan Serv Res 23(2):133–147

    Article  Google Scholar 

  • Bowen JT, Ford RC (2002) Managing service organizations: does having a ‘‘thing’’ make a difference? J Manag 28(3):447–469

    Google Scholar 

  • Chaudhuri A (1995) Brand equity or double jeopardy? J Prod Brand Manag 4(1):26–32

    Article  Google Scholar 

  • Chaudhuri A (2002) How brand reputation affects the advertising-brand equity link. J Advert Res 42(3):33–43

    Google Scholar 

  • Chaudhuri A, Holbrook MB (2001) The chain of effects from brand trust and brand effect to brand performance: the role of brand loyalty. J Market 65(2):81–93

    Article  Google Scholar 

  • Chu S, Keh HT (2006) Brand value creation: analysis of the interbrand-business week brand value rankings. Market Lett 17:323–331

    Article  Google Scholar 

  • Conchar MP, Melvin RC, Zinkhan GM (2005) Market valuation models of the effect of advertising and promotional spending: a review and meta-analysis. J Acad Market Sci 33(4):445–460

    Article  Google Scholar 

  • Dawes JG, Mundt K, Sharp B (2009) Consideration sets for financial services brands. J Financ Serv Market 14(3):190–202

    Article  Google Scholar 

  • de Chernatony L, Cottam S (2006) Internal brand factors driving successful financial services brands. Eur J Market 40(5/6):611–633

    Article  Google Scholar 

  • de Chernatony L, Dall’Olmo Riley F, Harris F (1998) Criteria to assess brand success. J Market Manag 14(7):765–781

    Article  Google Scholar 

  • de Chernatony L, Harris F, Christodoulides G (2004) Developing a brand performance measure for financial services brands. Serv Ind J 24(2):15–33

    Article  Google Scholar 

  • de Ruyter K, Wetzels M (2000) The role of corporate image and extension similarity in service brand extensions. J Econ Psychol 21(6):639–659

    Article  Google Scholar 

  • del R’io AB, V’azquez R, Iglesias V (2001) The effects of brand associations on consumer response. J Consum Market 18(5):410–425

    Article  Google Scholar 

  • Denby-Jones S (1995) Mind the gap. Banker 145:66–67

    Google Scholar 

  • Dick AS, Basu K (1994) Customer loyalty: towards an integrated framework. J Acad Market Sci 22(2):99–113

    Article  Google Scholar 

  • Doyle P (2001) Building value-based branding strategies. J Strat Market 9(4):255–268

    Article  Google Scholar 

  • Farquhar PH (1989) Managing brand equity. Market Res 1(3):24–33

    Google Scholar 

  • Fehle F, Fournier SM, Madden TJ, Shrider DG (2008) Brand value and asset pricing. Q J Finan Acc 47(1):3–26

    Google Scholar 

  • Feltham GA, Ohlson JA (1995) Valuation and clean surplus accounting for operating and financial activities. Contemp Acc Res 11(2):673–689

    Article  Google Scholar 

  • Gibson R (1990) The end of the line? Overkill on extensions. Wall St J (June 18):B1

  • Hirose Y (2002) The report of the committee on brand valuation. Ministry of Economy, Trade and Industry, The Government of Japan, Tokyo

    Google Scholar 

  • Ho YK, Keh HT, Ong J (2005) The effects of R&D and advertising on firm value: an examination of manufacturing and non-manufacturing firms. IEEE Trans Eng Manage 52(1):3–14

    Article  Google Scholar 

  • Hoch SJ, Ha YW (1986) Consumer learning: advertising and the ambiguity of product experience. J Consum Res 13(2):221–233

    Article  Google Scholar 

  • John DR, Loken B, Joiner C (1998) The negative impact of extensions: can flagship products be diluted? J Market 62(1):19–32

    Article  Google Scholar 

  • Jones J (1999) The future of banking: implications of branding and loyalty. J Financ Serv Market 3(1):53–66

    Google Scholar 

  • Kallapur S, Kwan SY (2004) The value relevance and reliability of brand assets recognized by UK firms. Acc Rev 79(1):151–172

    Article  Google Scholar 

  • Kamel J, Mela CF, Gupta S (1999) Managing advertising and promotion for long run profitability. Market Sci 18(1):1–22

    Article  Google Scholar 

  • Keller KL (1993) Conceptualizing, measuring, and managing customer-based brand equity. J Market 57(1):1–22

    Article  Google Scholar 

  • Keller KL (1997) Strategic brand management. Prentice Hall, New Jersey

    Google Scholar 

  • Kerin RA, Sethuraman R (1998) Exploring the brand value-shareholder value nexus for consumer goods companies. J Acad Market Sci 26(4):260–273

    Article  Google Scholar 

  • Koenker R, Basset G (1978) Regression quantiles. Econometrica 46(1):33–50

    Article  Google Scholar 

  • Loken B, John DR (1993) Diluting brand beliefs: when do brand extensions have a negative impact? J Market 57(3):71–84

    Article  Google Scholar 

  • Mizik N, Jacobson R (2003) Trading off between value creation and value appropriation: the financial implications of shifts in strategic emphasis. J Market 67(1):63–76

    Article  Google Scholar 

  • Mizik N, Jacobson R (2008) The financial value impact of perceptual brand attributes. J Market Res 45(1):15–32

    Article  Google Scholar 

  • O’Loughlin D, Szmigin I (2005) External and internal accountability of financial services suppliers: current paradoxes in managing expectations and experience. J Strat Market 13(2):133–147

    Article  Google Scholar 

  • Park CW, Milberg S, Lawson R (1991) Evaluation of brand extensions: the role of product feature similarity and brand concept consistency. J Consum Res 18(2):185–193

    Article  Google Scholar 

  • Petruzzellis L, Romanazzi S, Tassiello V (2011) Branding relationships in financial services: paradigm shift in Mediterranean countries. J Brand Manag 18(4/5):312–328

    Article  Google Scholar 

  • Reed R, Storrud-Barnes SF (2009) Systematic performance differences across the manufacturing-service continuum. Serv Bus 3(4):319–339

    Article  Google Scholar 

  • Reichheld FF (1996) Learning from customer defections. Harv Bus Rev 74(2):56–69

    Google Scholar 

  • Simon CJ, Sullivan MW (1993) The measurement and determinants of brand equity: a financial approach. Market Sci 12(1):28–52

    Article  Google Scholar 

  • Slotegraaf RJ, Pauwels K (2008) The impact of brand equity and innovation on the long-term effectiveness of promotions. J Market Res 45(3):293–306

    Article  Google Scholar 

  • Smith RE (1993) Integrating information from advertising and trial: processes and effects on consumer response to product information. J Market Res 30(2):204–219

    Article  Google Scholar 

  • Springen K, Miller A (1990) Sequels for the shelf. Newsweek (July 9):42–43

  • Srivastava RK, Shervani TA, Fahey L (1998) Market-based assets and shareholder value: a framework for analysis. J Market 62(1):2–18

    Article  Google Scholar 

  • Sullivan M (1990) Measuring image spillovers in umbrella branded products. J Bus 63(3):309–329

    Article  Google Scholar 

  • Valas E (2005) Small business survives. Dealerscope 47(1):54

    Google Scholar 

  • Winters LC (1991) Brand equity measures: some recent advances. Market Res 3(3):70–73

    Google Scholar 

  • Yoo B, Donthu N, Lee S (2000) An examination of selected marketing mix elements and brand equity. J Acad Market Sci 28(2):195–211

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Accounting, Feng Chia University, Taichung, Taiwan

    David Han-Min Wang

  2. Department of Public Finance, Feng Chia University, Taichung, Taiwan

    Tiffany Hui-Kuang Yu

  3. Contract Division, Chaoyang Life Insurance Company, Taichung, Taiwan

    Fang-Ru Ye

Authors
  1. David Han-Min Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Tiffany Hui-Kuang Yu
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Fang-Ru Ye
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to David Han-Min Wang.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Wang, D.HM., Yu, T.HK. & Ye, FR. The value relevance of brand equity in the financial services industry: an empirical analysis using quantile regression. Serv Bus 6, 459–471 (2012). https://doi.org/10.1007/s11628-012-0156-8

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11628-012-0156-8

Keywords

Search

Navigation