10 American Marketing Association / Winter 2012 AN EXPLORATORY INVESTIGATION OF REVERSE CAUSALITY RELATIONSHIPS AMONG BRAND EQUITY AND SPORT-RELATED SUCCESS IN SPORTS CLUBS Stefan Hattula, University of Mannheim, Germany Maik Hammerschmidt, University of Goettingen, Germany Johannes Hattula, University of St. Gallen, Switzerland Cornelia Ebertin, University of Mannheim, Germany Hans H. Bauer, University of Mannheim, Germany SUMMARY Worldwide, the sports industry continues to increase in importance in terms of its contribution to many coun- tries’ economies and cultures. For instance, Price Waterhouse Coopers predicts the global sports market will grow on average 3.8 percent each year and reach US$133 billion in 2013 (Price Waterhouse Coopers 2010). However, this development has brought a dramatic shift in the role and scope of marketing for such sports clubs. In particular, the growing relevance of brands for customers and other stakeholders requires a professional brand man- agement (Bristow and Sebastian 2001). For instance, the crucial importance of branding is reflected by the regu- larly published brand equity rankings for professional sports clubs that appear in Forbes Magazine. In spite of the high practical relevance there is a lack of scientific studies on the role of marketing and brand building activities in sports clubs – especially in terms of understanding the interrelationships among brand equity and sport-related success. Few empirical studies have conceptualized the idea of customer-based brand equity for sports clubs. According to Gladden and Funk (2001) and Bauer, Sauer, and Schmitt (2005), the brand equity of sports clubs is a multidimensional concept that next to others consists of sport-related success – the product performance of sports clubs – as an indicator of product- related attributes of brand equity. However, reverse cau- sality tests are missing for the relationship between sport- related success and brand equity. Like consumers, tal- ented players find clubs with a positive brand more appealing. Players pursue the opportunity to play for a club with a positive reputation (Cable and Turban 2003), using the club’s reputation as a cue to make inferences about job attributes and expecting to take more pride in playing for the club (Ashforth and Mael 1989). Thus, brand equity is an appropriate lever for acquiring new talent, through which brand equity directly contributes to a club’s sport-related success. The analysis of the relationship between brand equity and sport-related success is conducted along two studies. The first study addresses the stationary perspective which previous studies have taken in identifying the relevance of sport-related success for brand equity. Using seasonal- data for more than 120 professional soccer clubs and 1,600 data points in total, this first study develops and tests a simultaneous equation model (2SLS) of reversed cau- sality where sport-related success is formulated as a function of brand equity and vice versa (including several other drivers). The second study introduces a dynamic model that allows to simultaneously exploring the interre- lationships among customer-based brand equity and sport- related success over time. Drawing on a longitudinal club- level database covering 13 sports clubs across 30 years, we develop a vector autoregressive (VARX) model that tests for the dynamic links between the focal and several other constructs. The results of the first study show that reverse causal- ity is present in a stationary perspective. The perspective taken in past research is present by direct effects of sport- related success on brand equity. However, customer- based brand equity has a significant direct effect on sport- related success as well. Hence, the finding of a direct impact of sport-related success on brand equity as pro- posed in prior research has to be treated with caution. The results of the second study are decisive in exploring the true causality between that constructs. Here, we find that brand equity is an important driver of sport-related suc- cess. As no direct effect exists vice versa, the presumed causal direction set forth in previous research needs to be revisited for that relationship. The direct effect that might be observed in a stationary analysis results from an indi- rect effect in a dynamic perspective. We find a significant direct effect of sport-related success on fan commitment in next period which again has a significant direct time- lagged effect on brand equity. The results of our study are of particular relevance for clubs’ managers and marketing executives. First, the findings of both studies provide evidence that marketing efforts of sports clubs really pay off in terms of boosted sport-related success. Thus, branding becomes a strategic asset for a club to differentiate from competitors. Sports