Marketing accountability of Korea corporate: The relationship between branding investments and financial performance

Abstract

Korea corporate recently made a major inroad to global brand ranking, and raised their firm values with considerable growth in brand equity. Carefully designed marketing investments may contribute to substantial growth of Korean firm’s brand value and competitive strength in the global market. Brand equity is one of the most valuable assets of a firm and is considered to be a growth engine with the potential of lasting effects on the firm’s performance and value. This study assesses the relationship between the firms’ branding investments and their financial performance for the validation of marketing accountability. The authors examine Korean firm’s brand equity from seventeen industries, using Simon and Sullivan’s framework with the firm-level financial performance metrics based on firms’ accounting and financial data. A sample 514 firms on the Korean Stock Exchange listing (i.e. KOSPI and KOSDAQ) from 17 different industries for the period of global financial crisis (2005–2010) are selected to evaluate comparable brand equity among the selected industries. Findings reveal that Korea Corporate’s investments in marketing activities have a positive impact on brand equity and their financial performance. The study confirms the benefits of branding investments in Korea Corporate’s financial performance.