The impacts of Brand Activism on firm value: an emerging market perspective

This study investigates the impacts of Brand Activism on firm value using agency and signalling theory. Applying event study methodology, it examines 24 brands owned by Brazilian public firms between 2011 and 2021 and finds that Brand Activism tends to negatively affect firm value in this context. The study also assesses how different characteristics of Brand Activism, together with outside information and political ideologization of brands, influence these effects. While Brand Activism in the form of sponsorship increases negative effects, brand equity can mitigate them to some degree, functioning as a governance mechanism that limits the signalling of potential agency loss to shareholders. The study contributes to management literature by highlighting the importance of addressing socially relevant issues when managing brands, and their impact on firm value. It also offers insights for strategic decision-making and shows how Brand Activism can be leveraged to align with the interests of various stakeholders.