The Impact of an IPO Launch on Corporate Brand Value

Daniela Tavares, Lígia Febra, Magali Costa



Purpose: This study aims to investigate the impact of IPO launches on corporate brand value.

Methodology: The sample consists of 33 companies with international corporate brands that went public between 2007 and 2019. Brand values from the BrandFinance ranking were used as a proxy for corporate brand value. After analyzing the normality of the data, the Wilcoxon test was applied to the differences in brand value medians before and after the IPO. Finally, a panel data regression was estimated using the random effects model, using an adaptation of the model by Pagano et al. (1998).

Results: The results show that the launch of an IPO positively influences corporate brand value only in the long term, namely from the third year after the IPO.

Limitations: The results obtained may be conditioned by the small number of companies analysed. Other explanatory variables could have been incorporated, such as the undervaluation of the share price at the time of the IPO launch.

Practical Implications: The IPO can bring advantages to the company in terms of reputation, visibility, and the capture of financial resources for the development and management of corporate brands. The conclusions obtained suggest that launching an IPO can be a strategy to increase the value of the corporate brand. However, it is important to emphasize that these effects can take some time to manifest themselves and can be observed mainly in the long term.

Originality/Value: The main contribution of this study is to add to the existing literature on the impact of IPO launches on corporate brand value, as the existing literature analyses case studies and does not allow for generalization.

Keywords: Initial public offerings, Corporate brand value, BrandFinance

Acknowledgements: This work is financed by national funds through FCT - Fundação para a Ciência e a Tecnologia, I.P., under the project UIDB/04928/2020

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