Brands as Productive Assets : Concepts, Measurement, and Global Trends

The paper looks at brands from an economic point of view. First, we define concepts and set out this approach. Second, we analyze the conditions under which brands are long-lived productive assets and contribute to economic growth. Third, we review and improve the measurement of investment in brands. We find that a productive role for brands is consistent with assumptions used in the economic analysis of innovation. Productivity decompositions using the intangibles framework support brand as a contributor to economic growth. We then develop (1) a new U.S. series for brand investment to cover all marketing, including “in-house” investment, and (2) a harmonized global indicator of brand investment covering 63 countries. We find that brand investment held up relatively well in the U.S. during the Great Recession and its aftermath whereas measures based mainly on purchased advertising services send a different signal. Finally we offer an analysis of economic development that suggests branding rises with growth and provide econometric evidence showing a significant positive relationship between the rate of brand investment and level of economic development.