Paper #1016

Title:

Ownership structure, customer satisfaction and brand equity

Authors:

Anna Torres and Josep A. Tribó

Date:

March 2007 (Revised: June 2007)

Abstract:

This paper studies the interaction between ownership structure, taken as a proxy for shareholders’ commitment, and customer satisfaction - the main driver of consumer loyalty - and their impact on a firm’s brand equity. The results show that customer satisfaction has a positive direct effect on brand equity but an indirect negative one because of reductions in ownership concentration. This latter effect emerges when managers are mainly customer-oriented. Such result gives out a warning signal that highlights the perverse effect of implementing policies, focused excessively on satisfying customers at the expense of shareholders, on a firm’s brand equity. The empirical analysis uses an incomplete panel data comprising 69 firms from 11 nations, for the period 2002-2005.

Keywords:

Corporate social responsibility, brand equity, shareholders’ commitment and customer loyalty

JEL codes:

M31

Area of Research:

Management and Organization Studies

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