Marketing Expenses, Brand Equity, and a Firm's Financial Value

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Marketing Expenses, Brand Equity, and a Firm's Financial Value

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dc.contributor.advisor Erickson, Gary en_US
dc.contributor.author Ha, Kyoung Nam en_US
dc.date.accessioned 2012-09-13T17:26:29Z
dc.date.issued 2012-09-13
dc.date.submitted 2012 en_US
dc.identifier.other Ha_washington_0250E_10460.pdf en_US
dc.identifier.uri http://hdl.handle.net/1773/20624
dc.description Thesis (Ph.D.)--University of Washington, 2012 en_US
dc.description.abstract This dissertation examines the marketing-finance interface by interpreting strategic activities and brand equity in finance language. The first study focuses on the extent to which central brand equity dimensions (Differentiation, Relevance, Esteem, Knowledge, and Energy) influence downside risk, upside risk, and the differential between upside and downside risk. Results indicate that (i) Esteem has a negative effect on the risk differential, which comes from a more pronounced positive effect on downside risk, (ii) Energy has a positive effect on the risk differential, which comes from a more pronounced positive effect on upside risk, and (iii) Knowledge has a negative effect on both downside and upside risks, and, thus, it has no statistically significant effect on the risk differential. The second study aims at investigating the structural behavior among strategic activities, brand equity, and financial factors and their dynamic interactions in the long term as well as in the short term. Making use of the panel vector autoregressive model and orthogonalized impulse response analysis, this study provides empirical evidence of a link between strategic investments and brand value generation and finds feedback loops where advertising and research and development (R&D) expenditures and resultant brand equity increase cash flows and lower risk. The improved cash flows increase investments in R&D and advertising, enhancing brand value, which leads to a higher level of future-term cash flows, while the decreased risk induces a higher level of brand equity and as a result, lowers the level of risk. A high level of risk makes a manager invest more in R&D in the short run, which increases brand equity and reduces future-term risk, while an unexpected increase in risk leads to decreases in R&D and advertising expenditures in the long run. It is also found that the effect of a brand equity shock on cash flow and risk reaches a peak immediately and vanishes slowly, whereas the effect of an R&D shock reaches its peak and dies out quickly, and the effect of advertising shock reaches a peak and decays slowly. These findings allow managers to understand the marketing mechanisms and establish a tactical resource allocation. en_US
dc.format.mimetype application/pdf en_US
dc.language.iso en_US en_US
dc.subject Advertising and Research and Developement Expenditures; Brand Equity; Firm Value; Marketing-Finance Interface; Panel Vector Autoregressive Model; Structural Equation Model en_US
dc.subject.other Marketing en_US
dc.subject.other Business administration en_US
dc.title Marketing Expenses, Brand Equity, and a Firm's Financial Value en_US
dc.type Thesis en_US
dc.embargo.terms Delay release for 2 years -- then make Open Access en_US
dc.embargo.lift 2014-09-03T17:26:29Z


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