Contemporaneous relationship between corporate reputation and return
Abstract
Purpose
The purpose of this paper is to examine the contemporaneous relationship between changes in corporate reputations and stock prices.
Design/methodology/approach
The Harris Interactive Reputation QuotientTM is used as a measure of corporate reputation. Stock return and risk measures are evaluated for each Reputation QuotientTM survey period for the years 1999‐2007.
Findings
The results provide evidence that, in the aggregate, firm reputations are procyclical. Additionally, firms with improved reputations enjoy lower volatility in their stock prices than firms with diminished reputations.
Research limitations/implications
Due to the Harris Poll Online methodology, it is not clear that the price changes occur concurrently with the change in reputation.
Originality/value
This paper contributes to the finance literature by examining the effect of a change in corporate reputation on stock price.
Keywords
Citation
Krueger, T.M., Wrolstad, M.A. and Van Dalsem, S. (2010), "Contemporaneous relationship between corporate reputation and return", Managerial Finance, Vol. 36 No. 6, pp. 482-490. https://doi.org/10.1108/03074351011042964
Publisher
:Emerald Group Publishing Limited
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