Corporate reputation and firms' performance: Evidence from Spain

Abstract

Reputational risk is negatively perceived by stakeholders and economic agents, and can cause negative future effects on sustainability, corporate image and stakeholder engagement. This study analyzes and selects bad news regarding a sample of Spanish listed companies and uses it to explain abnormal returns and liquidity risk, to better understand how decisions should be taken in the future in a more innovative and sustainable way. The results indicate that there are negative reputational effects on excess returns and trading volume variations, and positive effects on volatility. Additionally, an increase in illiquidity is implied. The inclusion of bad reputational news in the model improves its goodness of fit by between 1.25% and 3%.

The Effect of Corporate Social Responsibility on Brand Performance with the Mediating Role of Corporate Reputation, Resource Commitment and Green Creativity

“…The results showed that corporate reputation has a positive and significant effect on brand performance. This finding is consistent with Gonzalez Sanchez and Morales de Vega [56], Kowalczyk and Kucharska [50], González-Rodríguez et al [54] and Javed et al [47]. To explain this finding, it can be claimed that corporate performance will be improved if the company is known and reputable, the company has chosen a good name for itself, the company has a good reputation and the company is one of the most important in its industry.…”

“…Studies that have examined the relationship between corporate social responsibility and corporate reputation have shown that there is a positive and significant relationship between corporate social responsibility and corporate reputation [51][52][53][54]. In addition, research has shown that there is a positive and significant relationship between corporate reputation and performance [50,[54][55][56]. Therefore, it is assumed:…”

Influence of Bloomberg’s Investor Sentiment Index: Evidence from European Union Financial Sector

“…These results provide a more accurate view of the influence of investor sentiment and a greater understanding of stock performance in reaction to this sentiment, as [86] states that different trading strategies based on this index outperform the benchmark ETF index and [80] find a relationship between stock prices and their sentiment index when the company's coverage in social networks is extensive. In summary, as a consequence of the evidence found, Bloomberg investor sentiment index has a slight influence (causality) on idiosyncratic shocks, possibly due to the construction of the index itself, which includes the news published in an aggregated way instead of considering them individually, as in [38]. By contrast, at the level of activity or subsector, it would be advisable that sentiment indexes be calculated at the sectorial rather than individual level.…”

“…The main research of the financial literature seems to show a consensus on the existence of a relationship between investor sentiment and the financial markets [8,20]. The market variable usually analyzed is the return on assets but the effect on trading volume [37,38] and volatility [17,31,39] has also been studied.…”

Suffering at Work: A Challenge for Corporate Sustainability in the Spanish Context

“…Spanish companies have considered for many years now that reputation and brand image are essential for their future, as well as the economic agents with which they work and sustainability. A study by González and Morales [13] states that there are data that prove that the reputation of a large number of companies is perceived quite negatively.…”