How does target firms’ brand equity impact the relationship between premium acquisition and abnormal return of acquiring firms?

Abstract

This study adopts the view of brand equity from consumers’ perspectives to examine if Taiwanese target firms’ brand equity can strengthen the positive effect of premium acquisition on abnormal return of acquiring firms Prior studies on the relationship between premium acquisition and abnormal return mainly focused on managerial and financial aspects from company-based view rather than customer-based view It has been proven that consumers and brand equity have a positive impact on the operation of a company but few studies investigate their role in the relationship between acquisition premium and post-acquisition outcomes that is what this study intends to examine Therefore we intend to apply a new perspective of consumers and branding to the study We collected 19 Taiwanese target samples from 1962 to 2017 and we evaluated these 19 Taiwanese firms’ brand equity by conducting questionnaire survey on 298 Taiwanese people Our results show that there is a positive relationship between acquisition premium and abnormal return of acquiring firms However our four hypotheses regarding brand equity elements namely the brand awareness perceived quality brand image and brand loyalty of target firms do not significantly strengthen the positive effect of acquisition premium on abnormal return of acquiring firms In other words when conducting a premium acquisition the abnormal return of acquiring firms will not significantly increase brought by acquiring target firms with high brand equity Among four brand equity elements brand awareness has a relatively significant effect on the positive relationship between acquisition premium and abnormal return

Date of Award	2017 Aug 17
Original language	English
Supervisor	Chiung-Hui Tseng (Supervisor)