Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/233164
Authors: 
Pfister, Benjamin
Schwaiger, Manfred
Morath, Tobias
Year of Publication: 
2020
Citation: 
[Journal:] Business Research [ISSN:] 2198-2627 [Volume:] 13 [Year:] 2020 [Issue:] 1 [Pages:] 343-384
Abstract: 
Corporate reputation is an important management objective, bearing the potential to create sustainable competitive advantage, and many scholars have studied its impact on firm performance. However, its effect on the cost of equity has only recently begun to attract the attention of academic research. Empirical evidence is scarce, and the results are inconclusive. Applying a validated measure of reputation, we scrutinize its impact for a set of German blue-chip companies between 2005 and 2011. We show that higher levels of reputation are associated with a lower future cost of equity. While reputation improvements are not followed by a measurable short-term effect, reputational damages lead to a significant increase in the future cost of equity within 6 months. We interpret our findings against the backdrop of the previous studies, offering several explanations for diverging results.
Subjects: 
Corporate reputation
Corporate risk
Cost of equity
Information asymmetry
Reputational damages
Intangible assets
JEL: 
G32
M14
D83
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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