Towards a better model for intangible asset valuation
- Autores: Samer Ajour El Zein
- Directores de la Tesis: Carolina Consolación Segura (dir. tes.)
- Lectura: En la Universitat Politècnica de Catalunya (UPC) ( España ) en 2020
- Idioma: inglés
- Materias:
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- Resumen
Context: Intangible assets have recently come under the spotlight because of their growing importance within the business world. Thus, Brand Equity, considered a strategic asset, makes up a substantial intangible asset for most companies. Furthermore, firms’ behavior has changed with innovations incorporated in the development of businesses. Companies seek to optimize all the components of their value chain. And, a major source, is the intangible value referred to as brand equity that has so many behavioral drivers.
Objectives: To develop a new integrated valuation model and understand the factors that affect brand equity. This research explores, as well, some sources of brand equity from both internal and external perspectives at its behavioral and financial level to achieve a more accurate brand equity measurement approach. The factors we consider are firm risk, competitiveness, intellectual company weight, the weight of ethical and sustainable investments, governance dimensions of brand equity value and, in addition, the financial structure of the firms.
Method: The methodology used is exploratory and follows a deductive and inductive process. The method combines an exhaustive revision of literature to determine the most relevant factors as well as collecting financial information from a list of publicly traded companies of major brand values and generic companies in the United States of America and Europe (S&P500 & EUR600). Applying an eclectic statistical analysis using correlation and regression analysis on a model, it tests the variables that further explain brand equity and the composition of brand equity valuation model. This research also intends to understand the nature of intangible assets, to improve Damodaran ´s brand equity model as an important intangible asset, and aims to understand the factors that affect the brand equity from both internal and external perspective to contribute to both the firm and the society.
Results: The first article, Understanding the Complexity of Intangible Assets presents the main developments in intangible assets valuation, an exhaustive literature review and provides empirical evidence for the positive relationship between the increase in the proportion of intangible assets and the rise in market capitalization and sales.
The second article, Financial Firm Risk: A Responsible Business Guide Control to Build Better Brand Equity and Company Value, provides practitioners with a simple method to determine a more adjusted value to the reality of brand equity for a branded Company (without bias). As well as studying the factors related to the financial risk of the firm, the findings show that the less risk a company has, the higher their brand equity value is.
The third article, Firm Behavior, an Engineering Tool for a Better Brand Value in all Sectors, shows which are the main factors contributing to the improvement of brand value. The sectorial analysis states that corporate socially responsible practices, contribute significantly to improving the company ´s brand value.
The fourth article, The Role of Sustainability in Brand Equity Value in the Financial Sector, analyzes some determinants of brand equity in the financial sector (e.g., ethical investments, sustainability, and firm behavior) and, the results obtained raise awareness of the positive impacts of sustainable investments on the brand value in the financial sector.
Implications: The main contributions to the literature include both theoretical and methodological aspects created, as well as, considerations on intangible assets, the valuation model and behavioral factors. This thesis proposes a model and a methodology to find a fair value for a branded company by using the average sector as a generic item. It considers the performance factors that affect this intangible asset and aims for a better brand equity value.
