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Title:Linking corporate reputation and shareholder value using the publication of reputation rankings PDF Logo
Authors:Tischer, Sven
Hildebrandt, Lutz
Issue Date:2011
Series/Report no.:SFB 649 discussion paper 2011-065
Abstract:Good corporate reputation is seen as one of the most valuable assets. It is believed to cause a multitude of favorable impacts within different stakeholder groups. As a consequence, a multitude of studies analyzed the relationship between corporate reputation and financial performance. However, the most of them raised the question of causation due to their methodology. In order to isolate the impact of corporate reputation on financial performance, some authors had conducted event studies, but without any success. Therefore, this study provides a comprehensive theoretical background, why reputation has to affect financial performance. According to this theory, two event studies are conducted to analyze the impact of publishing reputation rankings of the German Manager Magazine from 1998 to 2008 on share prices. As expected, we find positive or negative announcement effects regarding upgraded or respectively downgraded companies. Consequently, investors gain new information from the published rankings (increase or decrease in reputation) to adjust share prices.
Subjects:corporate reputation
reputation ranking
financial performance
shareholder value
event study
portfolio study
JEL:M14
M31
G14
G11
C12
C13
Document Type:Working Paper
Appears in Collections:SFB 649 Discussion Papers, HU Berlin

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