Glamour brands and glamour stocks

摘要

We explore the influence of customer perceptions from the product market on firms' return characteristics in the stock market. Using customers' opinions on over 1200 brands, we find that stocks of companies with prestigious brands have high market-to-book ratios and large negative loadings on the Fama-French HML factor. This relation is not explained by distress risk, asset irreversibility/growth, or information asymmetry. The HML loadings are most pronounced when retail investor ownership is high (when institutional ownership is low), when the brand is less familiar, and when market-wide investor sentiment is high. We conclude glamour in the product market is an important component of glamour in the stock market. (C) 2014 Elsevier B.V. All rights reserved.