Effect of brand value announcements on stock returns: empirical evidence from Turkey

Abstract

This study examines the effects of brand value announcements on stock returns of Turkish firms by using the event study methodology and long-term risk adjusted port-folio returns. We examined the stock-price impacts of 299 brand value announcements on the stock market performance of the firms within the years of 2010–2014 by using BrandFinance Turkey’s 100 ranking list as a data source. The findings indicate that the companies listed in the Turkey Top 100 Brands list earn positive abnormal returns 7 months after the announcement. Similarly, the companies which had greater brand values relative to the previous year, experienced significant positive abnormal returns in the 7-months period. Additional findings suggest that investors are able to beat the market in the long run regarding risk-adjusted returns by consistently investing in the Top Brands. Overall, the study demonstrates new evidence to the marketing-finance interface by focusing on the Turkish case as an important emerging market.

Keywords:

• brand value
• brand value announcement
• stock returns
• event study analysis
• emerging markets
• Turkey

JEL Classification:

• M31
• D53
• G14

Additional information

Notes on contributors

Pinar Basgoze

Pinar BASGOZE works as an Associate Professor (Marketing) Lecturer in Hacettepe University, Faculty of Economics and Administrative Sciences, Department of Business. Her recent research interests include the areas of marketing management, brand strategies, consumer behaviour and promotional strategies that are published in scientific journals including Total Quality Management and Business Excellence and book chapters.

Yilmaz Yildiz

Yilmaz YILDIZ is currently a PhD research assistant in Faculty of Economics and Administrative Sciences, Department of Business Administration at Hacettepe University. His recent research interests focus on pension finance, foreign investments, market efficiency and global valuation that are published in scientific journals as well as international conferences.

Selin Metin Camgoz

Selin METIN CAMGOZ works as an Associate Professor at the Department of Business Administration, Hacettepe University, Turkey. Her recent interests include behavioural finance, organizational behaviour, heuristics and biases in decision making processes, investor psychology and leadership. She has published several papers in journals including Journal of Business Research, Entrepreneurship & Regional Development: An International Journal, and Social Behaviour and Personality.