The Impact of Co-branding on Firm Stock Value

Abstract

Co-branding has become a widely used marketing strategy, yet little attention has been paid to its impact on a firm’s stock value. Prior literature has shown that using a co-branding strategy properly helps firms leverage the brand value and equity. By analyzing the stock price before and after co-branding announcement events in the U.S., this paper explores whether the introduction of cobranded products could positively impact a firm’s stock value and how different attributes of co-branding structure influence firm stock value. The results suggest that co-branding events indeed lead to significant abnormal returns, and a high (vs low) cobranding integration and a long (vs short) co-branding duration can generate significantly higher abnormal returns. In contrast, previous co-branding experience and co-branding exclusivity do not affect the stock return. The managerial implications are discussed in the concluding section.