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Does the Reputation Matter? Corporate Reputation and Earnings Quality

18 Pages Posted: 13 Sep 2007  

Hongtao Tan Sr.

Southwestern University of Finance and Economics (SWUFE)

Date Written: August 31, 2007

Abstract

Good corporate reputations are critical because of their potential for value creation, but also because their intangible character makes replication by competing firms considerably more difficult. This paper tests the relationship between the reputation and the earnings quality. Though I find no evidence to support that companies with good reputation share superior earnings relative to the corresponding industry levels, I do find the evidence that the reputation is not only positively correlated with superior earnings quality, but also does have positive effect on superior earnings quality, as well as the superior total sales do in Chinese public companies.

Keywords: Reputation, Accruals, Cash flow components, Earnings quality

JEL Classification: L14, M41, M43, M47, M14, P27

Suggested Citation

Tan, Hongtao, Does the Reputation Matter? Corporate Reputation and Earnings Quality (August 31, 2007). Available at SSRN: https://ssrn.com/abstract=1013127 or http://dx.doi.org/10.2139/ssrn.1013127

Hongtao Tan (Contact Author)

Southwestern University of Finance and Economics (SWUFE) ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

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