The Antecedents of Brand Governance

• Main Authors: Ying-Yu Hsu, 許熒玉
• Other Authors: Horng-Der Leu
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/83762503937433088369

博士 === 中原大學 === 企業管理研究所 === 101 === Brand value is one of the key components facilitating enterprises’ sustained growth. Although stable brand governance is an issue that cannot be overlooked, the literature on the topic of brand governance is scant. This study discusses the antecedents of brand governance and also deeply explores the effect of brand management performance on brand value and rating according to the stakeholder-agent theory and referencing current literature on financial performance and corporate governance. Data on brand ranking, brand rating, and brand value were collected from Interbrand’s annual report on the Best Global Brand Top 500 and Brand Finance’s Brand Finance Global 500. Also, financial information, shareholding ratios, and corporate governance risk indicators were downloaded and gathered from Datastream and Yahoo! Finance. After sorting and aligning the data through dropped-formed analysis, this study adopts a series of models to determine the coefficients and significance of the data. The contributions of this study include the finding that sound financial performance affects brand value, which will help manifest and upgrade brand rating. Outsiders generally use corporations’ financial performance as their primary investment indicator and motivation. In addition, similar to the agency theory on which this study is based, which focuses on the agency conflicts between the principal and the agent, an interesting finding of this study is that profitability could exactly be diluted by corporation insiders. The result highlights the necessity of corporate governance to ensure that insiders can enjoy the benefits generated by brand value. Meanwhile, this study is unable to find support for the proposed hypotheses on intangible assets and profitability due to the lack of open information. In addition, empirical finding shows that corporations can realize brand value with or without attaining economies of scale. This result implies that effective resource allocation is important for development toward economies of scale or scope economies. Future studies should consider more to this noteworthy issue. In terms of managerial implications, the results of this study show that management performance serves the prominent role of attracting institutional shareholdings. Also, the supervision and effective information sharing generated by external institutional shareholding can benefit the preservation of financial performance; corporation governance risk coefficients are correlated with financial performance. These variables will have significant effects on maintaining long-term prestigious brand value and brand rating. In other words, corporations should make brand governance a priority objective. Empirical findings show that the level of external institutional shareholding facilitates brand value growth and fosters the preservation of brand value rating. Therefore, firms should utilize the advantage offered by external institutional investments. In other words, they should comply with the aggressive supervision of external institutional shareholders, reduce any moral hazard and opportunistic behaviors, and integrate the beneficial information provided by these stakeholders in their decision-making process. The above helps shape a sound corporate governance mechanism. Furthermore, corporation scale is mainly concerned with the effective utilization and allocation of resource rather than merely pursues economies of scale (i.e., achieve the least average transaction cost), or economies of scope (i.e., effective and diversified production mechanisms). At present, majority of academic research is focused on corporate governance instead of brand governance. We suggest the disclosure of more thorough and continuous data on firms’ financial and shareholding structure in order to benefit more comprehensive studies on the antecedents of brand governance. Maintaining brand value and rating at high levels indicates the commitment to stakeholders and shareholders, which will in turn simulate the trust and support from the public. Brand governance is not an issue to be overlooked. Business managers should attach more importance to this topic in an effort to co-create brand value with throughout stakeholders.