Market valuation of corporate reputation
Brand associations affect image and one source of brand association is a company’s reputation. While the relationship between a positive corporate reputation and operational performance is intuitively appealing, there has been relatively little empirical research. This study, using a summary measure...
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| Format: | conferenceObject |
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2018
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| Online Access: | http://hdl.handle.net/10725/7406 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1639555 |
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| Summary: | Brand associations affect image and one source of brand association is a company’s reputation. While the relationship between a positive corporate reputation and operational performance is intuitively appealing, there has been relatively little empirical research. This study, using a summary measure from the Fortune survey of America’s most admired companies’, seeks to empirically test the relationship and thereby determine whether firms with a positive brand image, that is those with a positive reputation, experience an economic benefit. Fortune’s summary measure is used as a proxy for intangible assets, such as internally generated goodwill, customer service and intellectual capital. Findings focus around the addition of this summary value to market value in terms of a significant market value premium, superior financial performance, and lower cost of capital. Given these findings, marketing managers would do well to strive to build and maintain a positive reputation. |
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