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

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 16-004

Classification and Topics

• Classification: Wirtschaft ; Innovation and Invention: Processes and Incentives ; Intellectual Property and Intellectual Capital
• Subject: Brand Equity ; Firm Profitability ; Intellectual Property Rights ; Trademarks

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Crass, Dirk ; Czarnitzki, Dirk ; Toole, Andrew A.
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/126555
• URN: urn:nbn:de:bsz:180-madoc-405877
• Last update: 10.03.2025, 11:42 AM CET