The Effect of Co-branding Strategy Announcement on financial Analysts’ Earnings Forecast Revisions

Abstract

Co-branding strategy plays an important role in company’s marketing activities Although there are many marketing researches indicate that the influence of co-branding is positive for company there has not been any financial empirical study to support the importance of co-branding strategy Thus in this study we try to understand how co-branding will determine company’s wealth effect and examines the revisions of financial analysts’ earnings forecast when companies announce the co-branding strategy discussing in short-term and long-term respectively In this research we use co-branding announcements from LexisNexis Database as sample during 1995 to 2004 We examine analysts’ forecast of current-year earnings and five-year earnings growth around announcement of co-branding strategy The result shows no relation between analysts’ forecast revisions in current-year earnings with co-branding announcement But we find that there is a significant relation between analysts’ forecast revisions in five-year earnings growth rate and co-branding announcement

Date of Award	2015 Jul 2
Original language	English
Supervisor	Min-Hsien Chiang (Supervisor)