THE EFFECT OF BRAND VALUE ON MARKET CAPITALIZATION: AN EMPIRICAL STUDY ON BANKING INDUSTRY
Abstract
The research objective was to determine the impact of the brand value on market capitalization of a group of banks. This type of research is quantitative. The data analysis method uses the panel data regression analysis method, with fixed effect model (FEM) of sample of five banks for the period from 2009 to 2024. All the data used in this study were collected from bank’s financial statements, in addition to Brand Finance reports. Main findings of this research indicates that brand value has significant negative effect on market capitalization. In contrast, control variables Return on Assets (ROA), has a significant positive impact on the market capitalizations of the banks during the study period. However, the coefficient for GDP findings points out that within the context of this study, the GDP did not contribute positively the banks' market capitalization. In fact, the relationship was negative. In contrast, the control variables included ROA had a significant positive impact on the market capitalization of the banks. This suggests that banks' profitability (ROA) is more influential in driving market capitalization during the study period.
References
Arora, S., & Chaudhary, N. (2016). Impact of Brand Value on Financial Performance of Banks: An Empirical Study on Indian Banks. Journal of Industrial and Business Management, 4(3), pp. 88-96. doi: https://doi.org/10.13189/ujibm.2016.040302
Bagna, E. (2018). Is There Any Value in the Banks Brand? International Journal of Business and Management, 13(12), pp. 261-273. doi: https://doi.org/10.5539/ijbm.v13n12p261
Crispim, S. F., & Dornelles, M. (2020). Liquid brands time: a study on the value of top global brands. Gestão & Regionalidade, 37(110), pp. 254-269. doi: https://doi.org/10.13037/gr.vol37n110.6363
ILORI, O. O., & TANIMOWO, F. O. (2022). Heteroscedasticity Detection in Cross-Sectional Diabetes Pedigree Function: A Comparison of Breusch-Pagan-Godfrey, Harvey and Glejser Tests. International Journal of Scientific and Management Research, 5(12), pp. 150-163. doi: http://doi.org/10.37502/IJSMR.2022.51211
JONES, R. (2005). Finding sources of brand value: Developing a stakeholder model of brand equity. BRAND MANAGEMENT, 13(1), pp. 10-32. doi: https://doi.org/10.1057/palgrave.bm.2540243
SADALIA, I., DAULAY, I. E., MARLINA, L., & MUDA, I. (2019). The Influence of Intellectual Capital towards Financial Performance with Brand Value as an Intervening Variable. QUALITY MANAGEMENT, 20(168), pp. 79-85. Retrieved from https://e-tarjome.com/storage/btn_uploaded/2022-05-21/1653103569_12415-English.pdf
Shrivastav, S. M., & Kalsie, A. (2016). The Relationship Between CEO Duality and Firm Performance: An Analysis Using Panel Data Approach. The IUP Journal of Corporate Governance, XV(2), pp. 37-58. Retrieved from https://ssrn.com/abstract=2853984
Abbas, Q., Akbar, S., Nasir, A., Ullah, H. A., & Naseem, M. A. (2011). Impact of Foreign Direct Investment on Gross Domestic Product (A Case of SAARC Countries). Global Journal of Management and Business Research, 11(8), pp. 35-40. doi: https://journalofbusiness.org/index.php/GJMBR/article/view/531
Aisami, A., Umar, A., Manogaran, M., & Shukor, M. (2021). Test for the Presence of Autocorrelation in the Morgan- Mercer-Flodin (MMF) Model used for Modelling the Total Number of COVID-19 Cases for Brazil. BULLETIN OF ENVIRONMENTAL SCIENCE & SUSTAINABLE MANAGEMENT, 5(1), pp. 32-36. doi: https http://doi.org/10.54987/bessm.v5i1.589
Almumani, A. Y., & Almazari , A. A. (2021). THE EFFECT OF MAJOR FINANCIAL INDICATORS ON MARKET CAPITALIZATION IN JORDANIAN FINANCIAL COMPANIES LISTED IN AMMAN STOCK EXCHANGE. International Journal of Economics, Commerce and Management, IX(6), pp. 1-15. Retrieved from https://faculty.ksu.edu.sa/en/aalmazari/publication/364200
Al-Nimer, M. (2015). The Effect of Profitability Ratios on Market Capitalization in Jordanian Insurance Companies Listed in Amman Stock Exchange. European Journal of Business and Management, 7(7), pp. 385-391. Retrieved from https://www.iiste.org/Journals/index.php/JEDS/article/view/21061
Araujo, F. C., Lucas, F. J., & Yanaze, M. H. (2023). Brand Valuation: Recognizing the brands as strategical assets in the balance sheet of the companies. Revista de Gestão e Secretariado, 14(2), pp. 1516-1537. doi: http://doi.org/10.7769/gesec.v14i2.1629
Asmaul , H., & Ibnu , S. (2019). Effects of Return on Asset, Debt to Asset Ratio, Current Ratio, Firm Size, and Dividend Payout Ratio on Firm Value. International Journal of Economics and Financial Issues, 9(5), pp. 50-54. doi: https://doi.org/10.32479/ijefi.8595
BASGOZE, P., YILDIZ, Y., & CAMGOZ, S. M. (2016). EFFECT OF BRAND VALUE ANNOUNCEMENTS ON STOCK RETURNS: EMPIRICAL EVIDENCE FROM TURKEY. Journal of Business Economics and Management, 17(6), pp. 1252-1269. doi: https://doi.org/10.3846/10.3846/16111699.2016.1153517
Bolouprem, T., & Agboufa, M. (2023). Impact of Inflation, Interest Rates, Exchange Rates and GDP Growth on Stock Market Capitalization in Nigeria. African Banking and Finance Review Journal, 7(7), pp. 340–355. Retrieved from https://www.abfrjournal.com/index.php/abfr/article/view/293
DE MORTANGES, C. P., & RIEL, A. V. (2003). Brand Equity and Shareholder Value. European Management Journal, 21(4), pp. 521-527. doi: https://doi.org/10.1016/S0263-2373(03)00076-8
Etale, L., & Tabowei, P. (2019). MACROECONOMIC DETERMINANTS OF MARKET CAPITALIZATION IN NIGERIA: A FURTHER INVESTIGATION. International Journal of Quantitative and Qualitative Research Methods, 7(4), pp. 11-25. Retrieved from https://eajournals.org/ijqqrm/vol-7-issue-5-october-2019/macroeconomic-determinants-of-market-capitalization-in-nigeria-a-further-investigation/
Farooq, U., Tabash , M., Anagreh, S., & Khudoykulov, K. (2022). How do market capitalization and intellectual capital determine industrial investment? Borsa _, 22(4), pp. 828–837. doi: https://doi.org/10.1016/j.bir.2022.05.002
Hou, H., Cheng, S.-Y., & Yu, C.-P. (2012). Life Insurance and Euro Zone’s Economic Growth. International Conference on Asia Pacific Business Innovation and Technology Management. 57, pp. 126-131. Procedia - Social and Behavioral Sciences. doi: https://doi.org/10.1016/j.sbspro.2012.09.1165
IRIMIEŞ, C. (2012). BRAND EVALUATION – A BASIC FEATURE IN MODERN BRAND MANAGEMENT. Transylvanian Review of Administrative Sciences,(37), pp. 80-94. Retrieved from https://rtsa.ro/tras/index.php/tras/article/view/73
Karaca , S., & Karaca , A. (2019). Determination of Brand Value of Foreign Trade Capital Companies in ISE and Sustainability Index and the Effect of Sustainability Index on Brand Value. Broad Research in Accounting, Negotiation, and Distribution, 10(1), pp. 4-20. Retrieved from https://www.edusoft.ro/brain/index.php/brand/article/view/916
Kayali, C., Saygilib, A. T., & Demirlioglu, L. (2017). Determining the relationship between the brand value and financial ratios, and evaluation of the status of brand value in financial tables within the framework of the Turkish accounting standards. Selected Paper of 6th World Conference on Business, Economics and Management (BEM-2017). 4, pp. 218-225. New Trends and Issues Proceedings on Humanities and Social Sciences. Doi: https://doi.org/10.18844/prosoc.v4i10.3080
Loseva, O., Fedotova, M., & Bogatyreva, V. (2021). Impact of the Value of Intangible Assets on the Capitalization of Food Retailers for their Sustainable Growth. CORPORATE FINANCE, 25(4), pp. 48-63. doi: https://doi.org/10.26794/2587-5671-2021-25-4-48-63
OMIDIJI,, D. O., ADEGBIE, F. F., & AJAYI-OWOEYE, A. O. (2020). Evaluation of Return on Assets on Market Capitalization of Quoted Construction/Real Estate and Conglomerate Companies in Nigeria. International Journal of Emerging Trends in Social Sciences, 9(1), pp. 42-50. doi: https://doi.org/10.20448/2001.91.42.50
Prasad, H., & Shrimal, K. (2014). A Study of Relationship between Financial Performance and Market Capitalization: A Literature Review. International Conference on Management of Globalised Business 22-23 February (pp. 1-600). Curran Associates, Inc. Retrieved from https://www.researchgate.net/publication/284592290
Purnamasari , D. (2015). The Effect of Changes in Return on Assets, Return on Equity, and Economic Value Added to the Stock Price Changes and Its Impact on Earnings Per Share. Research Journal of Finance and Accounting, 6(6), pp. 80-89. Retrieved from https://scholar.google.com/citations?view_op=view_citation&hl=fr&user=bKshZVgAAAAJ&citation_for_view=bKshZVgAAAAJ:u5HHmVD_uO8C
Qurashi, M., & Zahoor, M. (2016). Impact of profitability, bank and macroeconomic factors on the market capitalization of the Middle Eastern banks. International Journal of Business and Management Invention, 5(11), pp. 56-62. Retrieved from https://www.researchgate.net/publication/315217276
Reddy, K., Mubeen, S., Raju, K., Jalaja , V., & Basha, M. (2023). DOES THE PERFORMANCE OF BANKING SECTOR PROMOTE ECONOMIC GROWTH? A TIME SERIES ANALYSIS. International Journal of Professional Business Review, 8(6), pp. 1-20. doi: https://doi.org/10.26668/businessreview/2023.v8i6.2128
Tarczyński, W., Tarczyńska-Łuniewskaa, M., & Majewski, S. (2020). The value of the company and its fundamental strength. 24th International Conference on Knowledge-Based and Intelligent Information & Engineering (pp. 2685–2694). Procedia Computer Science. doi: https://doi.org/10.1016/j.procs.2020.09.331
Thi Xuan , N. H., Thu , P. H., Thi, D. N., Thi , N. N., & Thi Kim , T. N. (2020). The Impact of Foreign Ownership and Management on Firm Performance in Vietnam. Journal of Asian Finance, Economics and Business, pp. 409–418. doi: https://doi.org/10.13106/jafeb.2020.vol7.no9.409
Ullas, C. (2015). Impact of brand value on market capitalization a study of banking sector. International Journal of Management, IT and Engineering, 5(3), pp. 187-197. Retrieved from https://www.ijmra.us/
Vinayaranjan, P., Narasimha Rao, V., & Sravani, M. (2022). GDP Impact on Market Capitalization - An Analysis of BSE. Accountant Journal, 57(8), pp. 37–40. doi: https://doi.org/10.33516/maj.v57i8.37-40p
Yusuf, L., & Dai, S. I. (2020). The Impact of Unemployment and Human Development Index on Poverty in Gorontalo Province 2008-2017. Jambura Equilibrium Journal, 2(1), pp. 7-16. doi: https://doi.org/10.37479/jej.v2i1.4495
Zavalii , T., Valinkevych , N., Ostapchuk , T., Lehenchuk , S., Laichuk , S., & P. Reznik , N. (2023). Managing Intangible Value Drivers of Technology Companies: Reporting Paradox Effects. Studies in Systems, Decision and Control,. doi: https://doi.org/10.1007/978-3-031-28314-7_79
Views:
27
Downloads:
18
Copyright (c) 2025 Bouthina Heriat, Safa Nid, Sara Abdelli
This work is licensed under a Creative Commons Attribution 4.0 International License.
All articles are published in open-access and licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0). Hence, authors retain copyright to the content of the articles.
CC BY 4.0 License allows content to be copied, adapted, displayed, distributed, re-published or otherwise re-used for any purpose including for adaptation and commercial use provided the content is attributed.
