Does Brand Management of Corporate Reputation Translate into Higher Market Value?

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 comprehensive approach, 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. Findings are that these firms are associated with 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.

Keywords: Corporate Reputation, Financial Markets, Corporate Social Responsibility, Ethics

JEL Classification: M41, M14, G34, L14

Suggested Citation: Suggested Citation

Smith, Katherine Taken and Smith, Murphy and Wang, Kun, Does Brand Management of Corporate Reputation Translate into Higher Market Value? (November 5, 2010). Journal of Strategic Marketing, Vol. 18, No. 3, pp. 201-221, 2010, Available at SSRN: https://ssrn.com/abstract=1135331