The Effects of Institutional Development and National Culture on Cross-National Differences in Corporate Reputation

Abstract

Corporate reputation is becoming more important to managers and scholars around the world. However, little is known about how much or why reputation differs across countries. We use institutional theory to fill this gap. We focus on institutional development, reflecting the expansion of formal institutions, and national culture, an important informal institution. We find that reputation is negatively related to institutional development and masculinity and positively related to power distance in a sample of 401 corporations from 25 countries. We recommend that institutional theory complement signaling theory in cross-national studies of corporate reputation.

Keywords: Corporate reputation; Cross-national comparisons; Institutional development; National culture; National institutions