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Linking corporate reputation and shareholder value using the publication of reputation rankings

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  • Tischer, Sven
  • Hildebrandt, Lutz

Abstract

Good corporate reputation is one of the most valuable assets and causes a multitude of favorable impacts within different stakeholder groups. As a consequence, a lot of studies analyze the relationship between corporate reputation and financial performance. However, most of them raise the question of causation due to their methodology. In order to isolate the causal impact of corporate reputation on financial performance, some authors conduct event studies, but without remarkable success. Therefore, this study provides initially a comprehensive theoretical background for why reputation should affect financial performance. According to the resulting hypotheses, an event study is conducted to analyze the impact of the publication of reputation rankings by the German Manager Magazin on share prices. As hypothesized, positive and negative announcement effects exist regarding upgraded or downgraded companies respectively. Consequently, investors gain new information from the published rankings (increases or decreases in reputation) to adjust share prices.

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  • Tischer, Sven & Hildebrandt, Lutz, 2014. "Linking corporate reputation and shareholder value using the publication of reputation rankings," Journal of Business Research, Elsevier, vol. 67(5), pages 1007-1017.
    • Handle: RePEc:eee:jbrese:v:67:y:2014:i:5:p:1007-1017
    DOI: 10.1016/j.jbusres.2013.08.007
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    3. Castilla-Polo, Francisca & Sánchez-Hernández, María Isabel & Gallardo-Vázquez, Dolores & Ruiz Rodríguez, María del Consuelo, 2016. "Diseño de un modelo de reputación para cooperativas oleícolas," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 19(1), pages 154-167.
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    13. Salman Khan, 2019. "Chief Reputation Officer (CRO): Envisioning the Role," Corporate Reputation Review, Palgrave Macmillan, vol. 22(3), pages 75-88, August.
    14. Inocencia M. Martínez-León & Isabel Olmedo-Cifuentes & Gary Davies, 2023. "The Virtuous Circle of Internal Corporate Reputation and Financial Performance," Corporate Reputation Review, Palgrave Macmillan, vol. 26(2), pages 97-110, May.
    15. Robert J. Brulle & Melissa Aronczyk & Jason Carmichael, 2020. "Corporate promotion and climate change: an analysis of key variables affecting advertising spending by major oil corporations, 1986–2015," Climatic Change, Springer, vol. 159(1), pages 87-101, March.
    16. Almoatazbillah S. Hassan, 2020. "Evaluating the Marketing Communication Strategy of Volkswagen in Post-Crisis Period: Application of Image Repair Theory," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 11(2), pages 1-87, March.
    17. Van Hoof, Bart & Núñez Reyes, Georgina & De Miguel, Carlos J., 2023. "Scaling up circular economy initiatives in Latin America and the Caribbean," Documentos de Proyectos 48835, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    18. Bernhard Swoboda & Cathrin Puchert & Dirk Morschett, 2016. "Explaining the differing effects of corporate reputation across nations: a multilevel analysis," Journal of the Academy of Marketing Science, Springer, vol. 44(4), pages 454-473, July.
    19. Salman Khan & Jacques Digout, 2018. "The Corporate Reputation Reporting Framework (CRRF)," Corporate Reputation Review, Palgrave Macmillan, vol. 21(1), pages 22-36, February.
    20. Luis Enrique Valdez-Juárez & Dolores Gallardo-Vázquez & Elva Alicia Ramos-Escobar, 2018. "CSR and the Supply Chain: Effects on the Results of SMEs," Sustainability, MDPI, vol. 10(7), pages 1-27, July.
    21. Gross, Hellen P. & Ingerfurth, Stefan & Willems, Jurgen, 2021. "Employees as reputation advocates: Dimensions of employee job satisfaction explaining employees’ recommendation intention," Journal of Business Research, Elsevier, vol. 134(C), pages 405-413.
    22. Noha Kamel, 2017. "Managing Reputation Online: Engagement with Customer Generated Reviews (Egyptian Travel Agencies Perspective)," Tourism Research Institute, Journal of Tourism Research, vol. 16(1), pages 117-134, June.
    23. Kaveh Moghaddam & Thomas Weber & Pouya Seifzadeh & Sara Azarpanah, 2021. "Internal Reputation of the Firm: CEO Retention and Firm Market Performance," Corporate Reputation Review, Palgrave Macmillan, vol. 24(4), pages 205-221, November.
    24. Vohra, Shalini & Davies, Gary, 2020. "Investor regret, share performance and the role of corporate agreeableness," Journal of Business Research, Elsevier, vol. 110(C), pages 306-315.
    25. Walsh, Gianfranco & Schaarschmidt, Mario & von Kortzfleisch, Harald, 2016. "Employees' Company Reputation-related Social Media Competence: Scale Development and Validation," Journal of Interactive Marketing, Elsevier, vol. 36(C), pages 46-59.

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