The Wealth Effect of Firm’s Brand Value on New Product Announcement

• Main Authors: Pei-EnChen, 陳培恩
• Other Authors: Shao-Chi Chang
• Format: Others
• Language: en_US
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/25598047829921842680

碩士 === 國立成功大學 === 國際企業研究所碩博士班 === 101 === New product announcement is becoming the powerful marketing strategies in an increasingly competitive battle for firms. Lots of previous literatures have shown new products announcement can generate a positive abnormal return. On the other side, the importance of brand value is mentioned by this study. Lots of loyal consumer will generate long-term profit for firms and they can bring continuously cash flow. Following the suggestion of Chaney, Devinney and Winer (1991), I also add trading volume as the dependent variable. In this thesis, I collect 2752 samples of new product announcements from LexisNexis Academic NEWS database and get the data from Compustat and CRSP. I also use the event study methodology to test the market reaction for the brand value. There are several findings of this thesis. Our regression results support hypothesis that when firms announce new products, brand value is positively associated with stock market reaction. Multiple products, firm size, dividend yield and relative R＆D intensity are all significant and match my expectations as well. On the other hand, my regression results which support hypothesis 2 also show the brand value is negatively associated with the trading volume within (-1, 0) and (-1, 1). Finally, this study finds the evidences to show that multiple products and risk-free rate have significant impact on the trading volume.