eThesis - School of Business electronic theses

RESEARCH OBJECTIVES: The objective of this thesis is to explore the concept of brand and to examine whether brand value estimates calculated by an independent brand consultancy are value relevant i.e. they contain information that is used by investors in firm valuation. International Accounting Standards do not allow internally generated brands to be recognised in the balance sheet whereas brands acquired in business combinations are recognised in the balance sheet. The brand value estimates of the most valuable global and Finnish brands are examined.

DATA: The data analysed in this thesis is obtained from the publications of Brand Finance that is an independent brand consultancy. Therefore the brand value estimates will not include any opportunistic bias. The brand values and brand ratings in year 2008 for the top 100 global brands and top 100 Finnish brands are examined in this thesis. The financial statement information needed in the empirical part of this thesis is collected from the Thomson One Banker database.

RESEARCH RESULTS: The results of this thesis suggest that the brand values of the top 100 global brands are value relevant, i.e. they include information that investors use in firm valuation. However, it seems that the top 100 Finnish brand values are not value relevant at conventional significance levels. This finding is interesting since it is not in line with previous research that has found brand values to be value relevant. The reliability of Finnish brand value estimates would be an interesting area for further research.