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

Journal of Strategic Marketing, Vol. 18, No. 3, pp. 201-221, 2010

38 Pages Posted: 21 May 2008 Last revised: 3 Apr 2014

See all articles by Katherine Taken Smith

Katherine Taken Smith

Texas A&M University-Corpus Christi-College of Business

Murphy Smith

Texas A&M University-Corpus Christi-Department of Accounting

Kun Wang

Texas Southern University - Jesse H. Jones School of Business

Date Written: November 5, 2010

Abstract

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

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

Katherine Taken Smith

Texas A&M University-Corpus Christi-College of Business ( email )

6300 Ocean Drive
Corpus Christi, TX 78412
United States

Murphy Smith (Contact Author)

Texas A&M University-Corpus Christi-Department of Accounting ( email )

6300 Ocean Dr
Corpus Christi, TX 78412
United States

Kun Wang

Texas Southern University - Jesse H. Jones School of Business ( email )

3100 Cleburne
Houston, TX 77004
United States

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