An Empirical Study On The Relationship Between Brand Portfolios Of Companies Listed On Chinese Textile Industry And Financial Value Of The Companies

Company brand management practice suggests that a strong brand portfolio inthe market can get more advantages, such as greater customer loyalty, widercooperation channels, better brand communication effects, more authorityopportunities and so on. With the value of brand portfolios being increasinglyprominent in the market, attention on brands outside has increasingly grown. Whateffects brand portfolios bring to the performance of the capital market becomes theconcern of academics and enterprises. Research shows that companies’ branddecisions, customers’ attitudes on brands will both have an impact on the value of thecompanies in the capital market. The health of companies’ in the capital market is animportant criterion for testing the companies’ success, so exploring the relationshipbetween brand portfolio strategies and the financial value of the companies, andenhancing the market value by improving decision-making has become a new hotspot.In this paper, Chinese listed companies in the textile industry selected as theresearch objects, Tobin Q value chosen as a measure of financial value, financial dataof listed companies in Chinese textile industry from2008to2012and the classicalregression model are used to empirically analyze the effects of the brand portfoliostrategies on the companies’ financial value. Firstly, based on the brand portfoliostrategies and the basic concept of the companies’ financial value, this papersummarizes the theories related to brand portfolio strategies and the companies’financial value. Then, the paper describes the sources of data and the processes,analyzes the samples by descriptive statistics, and elaborates the explained variables,explanatory variables and control variables. Next, in the empirical part of the paper,unit root tests and cointegration tests are done, and then the OLS model is used tofinish the regression analysis on panel data and to analyze the regression results.Study conclusion:(1) in the control of the company’s business areas, the case ofROE, financial leverage, operating income growth, company size and other factorsaffecting the company’s financial value, sub-brand strategies and multi-brandportfolio strategies are positively correlated to Tobin Q value, single brand strategiesare negatively correlated to Tobin Q value, and these strategies are significantlyrelated to Tobin Q value. The findings of the study show that for Chinese listedcompanies in the textile industry, if you want to pursue the financial value of thecompanies, you should adopt multi-brand portfolio strategies.(2) From the perspective of listed companies’ brand practice in Chinese textile industry, there arealmost37%of companies using sub-brand strategies with maximum contributions tothe companies’ financial value.43%of them use multi-brand portfolio strategieswhich can improve the financial value of the companies, and20%of which usingsingle brand strategies that will reduce their financial value.