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Media exposure and corporate reputation

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  • Cabral, Luís

Abstract

The media typically provide greater coverage of large and reputed corporations. I provide a theory of firm reputation dynamics based on the positive feedback effects resulting form the correlation between firm size and media coverage. I show that, in equilibrium, the dynamics of firm reputation are highly asymmetric: slow increases in reputation are followed by sudden drops. Moreover, endogenous media coverage implies greater dispersion of firm performance. Finally, I consider implications for corporate media strategy, namely the trade-off between “no news is good news” and “there is no such thing as bad publicity.”

Suggested Citation

  • Cabral, Luís, 2016. "Media exposure and corporate reputation," Research in Economics, Elsevier, vol. 70(4), pages 735-740.
    • Handle: RePEc:eee:reecon:v:70:y:2016:i:4:p:735-740
    DOI: 10.1016/j.rie.2016.07.004
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    References listed on IDEAS

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    Cited by:

    1. Zhou, Xi & Chen, Shou, 2021. "FinTech innovation regulation based on reputation theory with the participation of new media," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    2. Ramos, Célia M.Q. & Casado-Molina, Ana-María, 2021. "Online corporate reputation: A panel data approach and a reputation index proposal applied to the banking sector," Journal of Business Research, Elsevier, vol. 122(C), pages 121-130.
    3. Santiago, Andrea & Pandey, Shweta & Manalac, Ma. Theresa, 2019. "Family presence, family firm reputation and perceived financial performance: Empirical evidence from the Philippines," Journal of Family Business Strategy, Elsevier, vol. 10(1), pages 49-56.

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