The effect of brand value on the relationship between innovation drivers and barriers to corporate risk-taking

Document Type : Original Article

Authors

1 Department of Accounting, Mar.C., Islamic Azad University, Maragheh, Iran Graduated from Shahid Chamran University of Ahvaz with a PhD in Accounting.

2 Associate Professor of Accounting, Shahid Chamran University of Ahvaz, Ahvaz, Iran

Abstract

Purpose: The relationship between innovation and risk taking is a complex and two-sided issue. Innovation can increase risk taking, but it can also reduce risk taking by creating competitive advantage and high performance. Companies have to accept risky innovations in order to maintain competitive advantage, and a strong brand can act as a defensive shield against the negative consequences of risk. This issue lies at the intersection of two key areas of management: brand management and innovation management. Investigating the interaction of these dimensions can lead to the development of more comprehensive solutions for innovation policy and risk management. Due to the lack of direct studies on the effect of brand on the structure of innovative decision-making under risky conditions, the present study can help develop integrated models between the concepts of marketing (brand) and entrepreneurship (innovation and risk-taking). As a result, understanding this role is crucial for managers and decision makers. The aim of this study is to investigate the effect of brand value on relationship between innovation drivers and barriers with risk-taking of companies listed on the Tehran Stock Exchange.



Method: The present study is applied in terms of purpose and descriptive-post-event research in terms of method. Panel data and a multiple linear regression model were used to test the research hypotheses. Damodaran's (2015) model was used to measure the brand value variable, and Namazi and Moghimi's (2019) model was used to measure the drivers and barriers to innovation. The statistical population of this study is all companies listed on the Tehran Stock Exchange from the beginning of 2017 to 2024, and 139 companies were selected and studied using the systematic elimination method.

Results: The results of the study showed that tangible and intangible resources as innovation drivers have a positive effect on risk-taking. Among the variables related to innovation barriers, market ease and financial ease have a significant negative effect on risk-taking, but the knowledge barrier variable does not have a significant effect on risk-taking. The interactive effect of tangible and intangible resources with brand value indicates that tangible resources have no effect and intangible resources have a significant positive effect on risk-taking of the companies studied. The interactive effect of brand value with innovation barriers (market and financial barriers) indicates that a strong brand reduces the negative effect of barriers on a company's risk-taking, but the interactive effect of brand value with knowledge barriers does not have a significant effect on companies' risk-taking.

Conclusion: With the increase in brand value, the effectiveness of market barriers and financial barriers changes from a negative and decreasing effect to a positive and increasing effect on the risk-taking, which indicates that A strong brand, by creating greater ease in the market and finance, enhances risk-taking behavior. It can be said that brand value acts as a double-edged sword and the high pressure to maintain the brand, the increased tendency to high debt and more aggressive investment, the high cost of maintaining the brand in competitive conditions, increase the risk-taking of the companies studied. Despite knowledge barriers, strong brand value cannot affect companies' risk-taking, and knowledge barriers themselves are a factor in the lack of a proper definition of brand value, which prevents the creation of a strong brand. Also, brand value cannot compensate for the lack of technical knowledge and replace weak technical knowledge, and knowledge barriers themselves are a factor in avoiding innovative and bold activities.

Keywords

References

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