Abstract

Several studies in the marketing literature show that perceptual brand metrics are related to the intangible value of a firm and improve the ability to predict future cash flows. Using perceptual brand data for the three largest economies in Europe, the authors extend previous research by investigating whether perceived brand familiarity, differentiation and energy are reliable customer-based brand equity metrics for predicting future firm value. Furthermore, they investigate what impact these measures have on financial performance, measured as cash flow volatility. The authors find that notwithstanding the revealed cash flow relevance of energy, only changes in brand familiarity are associated with investors’ expectations of future cash flows.