Do corporate image and reputation drive brand equity in India and China? - Similarities and differences

Corporate signals, such as corporate image and corporate reputation, are potentially effective tools to alleviate consumer uncertainty about brands in emerging markets and may therefore enhance product brand equity. However, most studies targeting the effects of corporate signals are set in developed countries and also fail to compare different emerging markets to explore possible moderators to these relationships. We argue that the perceived uncertainty towards brands differs between emerging markets and that this difference is shaped by the institutional background in the country. This, in turn, influences the effectiveness of corporate signals. Using structural equation modelling, the study analyses large consumer samples from China and India. We discover that corporate image is a more effective signal in China than in India. Moreover, we find that corporate reputation mediates the corporate image – product brand equity relationship in emerging markets. Notably, the importance of the mediation depends on the country setting.