Business Commons^™

The Impact Of Brand Quality On Shareholder Wealth, Sundar G. Bharadwaj, Kapil R. Tuli, Andre Bonfer

Research Collection Lee Kong Chian School Of Business

This study examines the impact of brand quality on three components of shareholder wealth, stock returns, systematic risk and idiosyncratic risk. The study finds that brand quality enhances shareholder wealth as unanticipated changes in brand quality are positively associated with stock returns and negatively related to changes in idiosyncratic risk. However, unanticipated changes in brand quality can also erode shareholder wealth as they have a positive association with changes in systematic risk. The study introduces a contingency theory view to the marketing-finance interface by analyzing the moderating role of two factors that are widely followed by investors. The results show …