Covariance Structure Analysis of the Collaboration Between Local Enterprises and Local Governments for the Creation and Communication of Value in Local Brands

Establishing regional brands is indispensable for revitalizing local areas; however, advancing such initiatives requires collaboration with a diverse array of stakeholders. This study focuses on local enterprises, which are pivotal stakeholders in regional branding strategies, and aims to elucidate the impact of their collaboration with local governments and degree of brand penetration on their willingness to engage in regional branding. We define regional branding as comprising two types: “comprehensive regional branding,” which involves branding the region, and “resource-based regional branding,” which pertains to branding specific local products and services. We propose a hypothetical model suggesting that the depth of collaboration with local governments influences local enterprises’ engagement in regional branding. We conducted a questionnaire survey among local businesses in Fukuyama City, Hiroshima Prefecture, Japan, and verified the hypothetical model through covariance structure analysis using the survey data. The results revealed a moderate correlation between the willingness to participate in regional branding and the extent of collaboration with local governments. Furthermore, we identified factors that influence local enterprises’ deepening relationships with local governments and those that enhance brand penetration among local enterprises, specifically the impact of the degree of understanding of the local culture and the attractiveness of the brand.