Theorizing Reputational Spillovers
39 Pages Posted: 2 Aug 2015
Date Written: July 30, 2015
Reputational effects on firms whose actions have social consequences are known to affect the reputation of other firms, but the theoretical understanding of this “reputational spillover” has thus far been limited. This paper furthers theoretical development of the phenomenon by uncovering and examining its facets that have received little or no consideration – the severity of spillover across firms and the full scope of the spillover boundary, in which a spillover can reach firms both within and across industries. A theoretical framework that explains the process of reputational spillover is developed, comprised of the focality of the event that affects the origin firm from which the spillover emanates and the perceived relatedness of target firms that receive spillover effects. The framework also includes the effect of environmental factors and institutional intermediaries on the spillover process.
Keywords: Corporate reputation, social issues, repetitional spillover, self-regulation
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