Real Options Approach to Financial Valuation of Brands
Keywords:
Asset Pricing, Marketing, Intangible assets, brands, financial valuation of intangibles, compound real options, Clasificación JEL, G1, G12, M31, O34Abstract
Intangible assets are an important component of the market value of a company, particularly in brands which represent the competitive advantage of the company; however, both Accounting and Finance face a great challenge when trying to value them. The methods which have been proposed by the literature appear to be subjective, limited, and based on some theoretical errors. Their use is mainly circumscribed to the management of intangibles. This paper proposes a methodology for the financial valuation of brands based on the application of a compound real option model to a patent valuation, acknowledging the similarities in their construction. Later, an application to an insurance company is presented.Downloads
References
Andriessen, D. (2004). IC Valuation and Measurement: Classifying the State of the Art. Journal of Intellectual Capital, 5(2), 230-242.
Andrikopoulos, A. (2008). Intellectual Capital and Real Options: Agency Theory and the Dynamics of R&D Investments. International Journal of Learning and Intellectual Capital, 5(1), 20-32.
Arregui, G., Rodríguez, A. & Vallejo, B. (2008). Opciones reales en la valoración de intangibles: la percepción de los directivos en el país vasco. Obtenido de http://dialnet.unirioja.es/servlet/articulo?codigo=2751702
Baldi, F., & Trigeorgis, L. (2009). A Real Options Approach to Valuing Brand Leveraging Options: how much is Starbucks Brand Equity Worth? Obtenido de http://69.175.2.130/~finman/Reno/Papers/RenoProgram.htm
Bouteiller, C. (2002). The Evaluation of Intangibles: Advocating for an Option Based Approach. Obtenido de http://www.departments.bucknell.edu/management/apfa/
Hamburg%20Papers/
Cox, J.C., Ross, S.A., & Rubinstein, M. (1979). Option Pricing: A Simplified Approach. Obtenido de http://fisher.osu.edu/~fellingham_1/seminar/
Damodaran, A. (2006). Dealing with Intangibles: Valuing Brand Names, Flexibility and Patents. Obtenido de http://ssrn.com/abstract=1374562
Edvinsson, L. & Malone, M.S. (1998). El capital intelectual. Cómo identificar y calcular el valor inexplorado de los recursos intangibles de su empresa. Bogotá: Norma.
Fernández, P. (2007). Valoración de marcas e Intangibles. Documento de investigación. No. 686. Obtenido de http://papers.ssrn.com/sol3/papers.cfm?abstract_id=975471
Iversen, E. J., & Kaloudis, A. (2003). IP-Valuation as a Tool to Sustain Innovation. STEP Report Series. The STEP Group, Studies in technology, innovation and economic policy. Obtenido de http://ideas.repec.org/p/stp/stepre/2003r17.html
Lambrecht, B. M. (2000). Strategic Sequential Investments and Sleeping Patents. En Project Flexibility, Agency and Product Market Competition: New Developments in the Theory and Application of Real Options Analysis (pp. 297-323). Oxford: Oxford University Press.
Lozano, M.C., & Fuentes, F. (2004). El valor de la marca y el valor de la empresa de internet. Investigaciones Europeas de Dirección y Economía de la Empresa, 10(1), 111-133.
Mantilla, S. (2004). Capital intelectual & Contabilidad del conocimiento. Bogotá: Ecoe Ediciones.
Organización Mundial de la Propiedad Intelectual –OMPI. (2009a). Principios básicos de la propiedad industrial. Publicación de la OMPI No. 895. Obtenido de http://www.wipo.int/freepublications/es/index.jsp?cat=intellectual%20property
Organización Mundial de la Propiedad Intelectual –OMPI–. (2009b). ¿Qué es la propiedad intelectual? Publicación de la OMPI No. 450. Obtenido de http://www.wipo.int/free publications/es/index.jsp?cat=intellectual%20property
Pakes, A. (1984). Patents as Options: Some Estimates of the Value of Holding European Patents Stocks. Obtenido de http://ideas.repec.org/a/ecm/emetrp/v54y1986i4p755-84.html
Picyk, A. (2005). Valoración de marcas. Obtenido de http://dx.doi.org/10.2139/ssrn.1496300
Salinas, G. (2006). El potencial de una extensión de marca. Infobrand digital. Obtenido de http://www.infobrand.com.ar/notas/7090-El-potencial-de-una-extensi%F3n-de-marca
Schwartz, E.S. (2003). Patents and R&D as Real Options. Economic Notes, 33(1), 23-54. Obtenido de http://www.nber.org/papers/w10114
Sereno, L. (2008). Real Options and Economic Valuation of Patents. Obtenido de http://www.academia.edu/657742/Real_options_and_economic_valuation_of_patents
Sereno, L. (2010). Real Options Valuation of Pharmaceutical Patents. A Case Study. Obtenido de http://dx.doi.org/10.2139/ssrn.1547185
Suárez, A.S. (2004). Opciones reales. [Documento de trabajo]. Obtenido de http://eprints.ucm.es/6820/
Sullivan, P. (2001). Rentabilizar el capital intelectual. Técnicas para optimizar el valor de la innovación. Buenos Aires: Paidós.
Teece, D. (1998). Capturing Value from Knowledge Assets: The New Economy, Markets for Know-How, and Intangible Assets. California Management Rewiew, 40(3), 55-79. Obtenido de http://apps.business.ualberta.ca/mlounsbury/techcom/readings/teece.pdf
Weeds, H. (1999). Sleeping Patents and Compulsory Licensing: An Options Analysis. Warwick Economic Research Papers, (577). Obtenido de http://privatewww.essex.ac. uk/~hfweeds/sleeping%20patents.pdf
Downloads
Published
Issue
Section
License
Authors who publish with this journal agree to the following terms:
a. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under aCreative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
b. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
c. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
