The condition of economies. Do most valuable global brands matter?

Abstract

Research background: Brands are considered to be the most valuable asset of a company. Some of them achieve spectacular global results. The significance of global brands is proved by the fact that their value is often greater than the sum of all company?s net assets.

Purpose of the article: The aim of this article is to highlight that brand value does not only create company?s value, but also leverages economies. The Authors claim that even though global brands are sold worldwide and are a part of ?global factories?, they strongly relate to the development of economies in the countries where these brands? headquarters are located.

Methods: Based on 500 Brandirectory, the Most Valuable Global Brands ranking powered by Brand Finance, an analysis of spatial autocorrelation of brand values, GDP per capita was performed and also the interdependency between them was illustrated with the use of the spatial cross-regressive model (SCM). The SCM approach allowed us to include spatial effects of brand values into the final form of the estimated equation. The empirical analysis was performed for 33 countries in 2014.

Findings & Value added: Findings confirm the hypothesis that there is a highly statistically significant relationship between brand value and GDP per capita and, what?s more, it is observed that spatial dependencies matter for brand values. The evidence is based on the results of spatial cross-regressive model (SCM).

Keywords

GDP, brand value, spatial regression, spatial cross-regressive model, spatial statistics, country of brand origin

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