Brand premium: evidence from Asia

Official URL: https://dx.doi.org/10.1016/j.pacfin.2026.103335

This paper examines the relation between brand values and the cross-section of equity returns in China, Japan and Korea. Using Interbrand's best brand lists for each local market, we find that a value-weighted portfolio of stocks with top brands generates an annual abnormal return of 6–10%. This result is robust to alternative portfolio weighting schemes and the inclusion of intangibility-related factors in the pricing models. Moreover, the inclusion and exclusion of top brands in the updated lists enhances the magnitude of the brand premium. Furthermore, the brand premium is not specific to crisis periods. Cross-sectional regressions that control for a variety of firm characteristics including intangible ones reiterate the finding that stocks with highly valuable brands exhibit outperformance. These results are consistent with the hypothesis that market participants underestimate the value of brands when they perform company valuations.