As expected, RISK, SIZE, and BRAND have a high degree of statistical significance in explaining the variations in PRBV. However, PEPSG was not statistically significant as it was in prior research.
This finding suggests that brand value is important (and, perhaps most important) in explaining variations in PRBV, but that other variables do add significantly to the explanatory power of the model.
This suggests that firms with higher betas and larger companies tend to have lower PRBV's regardless of the value of the firms' brands.
Given that the regression model's R2 is 0.535, it is obvious that there are other important variables that enhance the explanation of variances in PRBV. For example, Roos, Roos, Edvinsson, and Dragonnetti (1997) theorize that the difference between a firm's market value and its book value is represented by "intellectual capital."
Table 2 reports statistics for six variables chosen for the sample companies in the high versus low PRBV categories.
Of particular interest to our research objectives, the variable "plant assets to total assets" is considerably higher in the low PRBV category indicating a greater level of tangible capital intensive assets.
Table 3 reports statistical tests of differences between the high and low PRBV categories for the seven variables.
Especially important to the premises explored in our research is the finding that levels of tangible capital intensity are significantly higher for the low PRBV category than they are in the high PRBV category.
By looking at the composition of companies in the high and low PRBV categories, we observe a predominance of knowledge and service based companies in the high group and a predominance of more traditional companies in the low group.