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Indiana University Bloomington


Kelley Marketing

Kelley marketing faculty have served as consultants and trainers for IBM, 3M, Dow, Diebold, ExxonMobil, Publix, National City, Cummins, Microsoft, Touchstone Energy, J.D. Power and Associates, and many other organizations.

Recent Publications

Journal Articles

Customer-Based Brand Equity and Firm Risk

2009, Journal of Marketing

Lopo L. Rego, Matthew T. Billett, Neil A. Morgan


Investors and managers evaluate potential investments in terms of risk and return. Research has focused on linking marketing activities and resource deployments with returns but has largely neglected marketing's role in determining risk. Yet the theoretical literature asserts that investments in market-based assets, such as brands, should lead to reductions in firm risk. Adopting risk measures that are well established in the finance literature, the authors use credit ratings to capture debt-holder risk and the standard deviation of stock returns to measure equity-holder risk, which they then decompose into systematic and unsystematic equity risk. The authors examine the impact of consumer-based brand equity (CBBE) on firm risk using data covering 252 firms from EquiTrend, COMPUSTAT, and the Center for Research in Security Prices over the 2000-2006 period. They find that a firm's CBBE is associated with firm risk and explains variance in the risk measures beyond that explained by existing finance models (i.e., it has "risk relevance"). They also find that CBBE has a stronger role in predicting firm-specific unsystematic risk than systematic risk. The results have clear economic significance and suggest that managers should make brand management part of the firm's risk management strategy and protect or even increase CBBE investments during periods of economic uncertainty.


Rego, Lopo L., Matthew T. Billett and Neil A. Morgan (2009), "Customer-Based Brand Equity and Firm Risk," Journal of Marketing, 73 (6), 47-60.


Research Award #4-1462a, Marketing Science Institute


consumer-based brand equity, firm risk, firm returns, shareholder value, marketing-finance interface