Measuring the effect of brand equity on shareholder value on companies traded in Borsa Istanbul

The concept of shareholder value is based on a perspective that considers value creation from a shareholder perspective. Brand equity, on the other hand, is an intangible asset created by the marketing effort. Marketing managers have a hard time proving the value of branding in clear financial terms. Because first of all, although intangible assets are often seen as responsible for business growth and creating shareholder value, they do not appear on company balance sheets. Moreover in general the field of marketing is seen as related to the creation of customer value, while the field of shareholder value belongs to finance. However, the ultimate performance measure for marketing from a top management perspective is in line with the finance school of thought. Supporting the role of the brand in increasing shareholder value with concrete data is important in terms of directing both the management in general and the managers and employees responsible for marketing and finance to the brand equity and the activities (plan, budget, strategy, effort, etc.) to increase this value. Therefore, in this study, it is aimed to reveal the effect of brand equity on shareholder value from a perspective that combines both marketing and finance perspectives. In order to measure this effect, Carhart's Four-Factor Model is taken as a basis, while the Capital Asset Pricing Model and the Fama-French Three-Factor Model are included in the study and it is aimed to present a comparative analysis of returns and risks. In this respect, for the years of 2010-2020, companies traded in Borsa Istanbul (BIST) were analyzed in two separate categories, "Portfolio of companies with high brand value" and "Portfolio of other companies", and compared with each other in terms of returns and risks. The brand equity data taken into consideration within the scope of the research includes the brands included in the list of "Turkey's 100 Most Valuable Brands" announced every year by Brand Finance. While the results of the study support the connection of high return and high risk in terms of finance theory, it has brought a different perspective to the views that "valuable brands have higher returns and less risk", which stand out in the marketing literature regarding the brand value-shareholder value relationship. When the results of the research are evaluated, evidence has been obtained that valuable brands contribute to shareholder value with high returns in the context of the Turkish market, but they do not do this with less risk, but in return for a high risk. In addition, the research findings gave significant results in terms of the four risk factors in Carhart's Four-Factor Model and differed from similar studies in this sense.