This study investigates the interaction between suppliers and fraudulent customer firms from the perspective of reputation damage and reputation recovery. Specifically, reputation damage from the ...regulatory penalty for corporate fraud induces the trust crisis and suppliers respond to fraudulent firms by reducing the trade credit supply. To repair a damaged reputation and rebuild the trust, fraudulent firms raise the ratio of prepayment to purchase volume when purchasing from small suppliers and increase the proportion of purchase from large suppliers in the next year. Channel analysis shows that the declining trust is one of potential mechanisms to reduce the trade credit. Furthermore, the negative effect is more pronounced for fraudulent firms with non-related party suppliers, higher supplier concentration, less analyst coverage, and for fraudulent firms located in regions with less-developed financial environment. Additionally, supplier sanctions have a spillover effect on non-fraudulent customer firms in the same industry. The conclusions are robust to a series of checks, including PSM–DiD, firm and year fixed effect, the alternative measure for trade credit financing, the industry-year fixed effect and the consideration of the monetary policy and financial crisis.
In this study, we examine the empirical association between corporate social responsibility (CSR) and information asymmetry by investigating their simultaneous and endogenous effects. Employing an ...extensive U.S. sample, we find an inverse association between CSR engagement and the proxies of information asymmetry after controlling for various firm characteristics. The results hold using 2SLS considering the reverse side of information asymmetry influencing CSR activities. The results also hold after mitigating endogeneity based on the dynamic panel system generalized method of moment. Furthermore, the CSR-information asymmetry relation is amplified in high-risk firms due to managers' efforts to build a good reputation. Last, we find that CSR engagement is inversely associated with reputational risk measure and lower predicted value of reputational risk is positively associated with lower information asymmetry measures. We interpret these results as supporting the stakeholder theory-based, reputation-building explanation that considers CSR engagement as a vehicle to build and maintain firm reputation thereby enhancing the information environment.
Customer referencing is a strategy that firms can use to disclose their connections with reputable customers as a means of enhancing their own reputations. We study the capital market benefits of ...naming reputable nonmajor customers in firms' financial reports to provide empirical evidence on whether this form of customer referencing has important practical implications. We predict and find that firms enjoy a lower cost of equity when they engage in customer referencing in their financial reports, consistent with the argument that this form of voluntary disclosure increases investor attention and customer certification. In cross‐sectional analyses, we predict and find that the benefits of customer referencing are more pronounced for firms that (1) lack major customers or reputable major customers, (2) name customers whose reputations exceed their own, and (3) face higher competition. Overall, our study provides evidence that communicating certain interorganizational connections can generate capital market benefits for disclosing firms.
Résumé
Référencement de la clientèle et avantages liés au marché financier : données probantes associées au coût des fonds propres
Le référencement de la clientèle est une stratégie que les entreprises peuvent utiliser pour révéler leurs liens avec des clients respectables afin d'améliorer leur propre réputation. Nous étudions les avantages sur le marché financier que procure la mention de clients respectables, sans qu'ils soient des clients de premier plan, dans les rapports financiers des entreprises pour dégager des données empiriques indiquant si ce type de référencement a d'importantes conséquences pratiques. Nous prédisons et établissons que les entreprises profitent d'un coût de fonds propres moins élevé lorsqu'ils nomment des clients dans leurs rapports financiers, conformément à l'argument voulant que ce type de divulgation volontaire accroisse l'attention portée par les investisseurs ainsi que la certification par la clientèle. Dans le cadre d'analyses transversales, nous prédisons et montrons que les avantages du référencement de la clientèle sont plus prononcés pour les entreprises qui (1) n'ont pas de clients de premier plan ou de clients de premier plan respectables, (2) nomment des clients dont la réputation surpasse la leur et (3) font face à une plus forte concurrence. Dans l'ensemble, notre étude fournit des données probantes indiquant que la divulgation de certains liens interorganisationnels peut procurer des avantages liés au marché financier.
The purpose of this study is to investigate the relationships among corporate social responsibility (CSR), corporate brand credibility, corporate brand equity, and corporate reputation. Structural ...equation modeling analysis provided support for the hypotheses from a sample of 867 consumers in South Korea. The results showed that CSR has a direct positive effect on corporate brand credibility and corporate reputation. In addition, the results indicate that corporate brand credibility mediates the relationship between CSR and corporate reputation. Moreover, corporate brand credibility mediates the relationship between CSR and corporate reputation. Finally, the relationship between CSR and corporate brand equity is sequentially and fully mediated by corporate brand credibility and corporate reputation. The theoretical and managerial implications of the results and limitations are discussed, and future research directions are suggested.
When employees use social media, their behavior can be attributed to their employer, thereby shaping the company's reputation in the eyes of various stakeholders. Thus, employees are well advised to ...use social media in a way that does comply with social norms in social media to avoid reputational damage for their firm. However, research has been anemic to the drivers of appropriate employee social media behavior. This research combines organizational behavior research related to employee engagement and reputation with work concerning employees and social media to arrive at a model that relates the firm's social media appearance with appropriate employee social media behavior. Central to this model is employees' awareness that they can shape their employer's online reputation. Based upon two quantitative studies, this research tests a model of social media-related antecedents and consequences of employees' awareness of their impact on corporate reputation, and discusses managerial and theoretical implications.
Management scholars have paid close attention to the construct of organizational or corporate reputation (CR), particularly in the applied business ethics and corporate social responsibility (CSR) ...fields. Extant research demonstrates that CR is one of the key mediators between CSR and important organizational outcomes, which ultimately improve organizational performance. Yet, hitherto the research focused on CR construct has been plagued by multiple definitions, conflicting conceptualizations, and unclear operationalizations. The purpose of this article is to provide theoretical ground for positioning of CR as an assessment construct that is modeled as a second-order factor affecting individual first-order dimensions (having a reflective nature), and to provide methodological and empirical support toward such conceptualization. We assert that intangible, socially complex, and causally ambiguous CR (latent construct) can be accurately estimated through its individual measurable dimensions. Using survey data from Peru, we empirically test the hypothesized second-order reflective model within a hierarchy of nested and non-nested models, and compare its model fit and predictive power (nomological validity) with alternative conceptualizations. Modeling CR as a second-order reflective construct relies on a set of theoretical propositions and yields several methodological advantages, including strong conceptual interpretability and parsimony when tested within a nomological context. We explicitly demonstrate positive organizational outcomes of CR: customer trust, corporate identification, in-role behavior, and extra-role behavior. Then, we demonstrate that the shorter scales of CR can be used as a good proxy for the full construct measure. The paper concludes by highlighting theoretical insights, and methodological and managerial implications of the findings.
Previous studies on corporate social responsibility (CSR) communication suggest that firms' social initiatives should be communicated through third-party, non-corporate sources because they are ...perceived as unbiased and therefore reduce consumer skepticism. In this article, we extend existing research by showing that source effects in the communication of social sponsorships are contingent on the brand's pre-existing reputation. We argue that the congruence between the credibility and trustworthiness of the message source and the brand helps predict consumer responses to a social sponsorship. The results show that a non-corporate source (publicity) generates more positive brand evaluations than a corporate source (advertising) when the sponsor has a positive reputation. However, the converse effect occurs when brand reputation is low: when the sponsor has a poor reputation, a corporate source generates more positive brand evaluations than a non-corporate source. Mediation analyses show that the interaction effect between CSR information source and brand reputation can be explained by sponsorship attitude, persuasion knowledge, and perceived fit between the brand and the cause.
Purpose
– The purpose of this paper is to explore the possible congruence of an academic organization’s reputation among various stakeholder groups. A potential measure of reputation that can be ...applied across multiple stakeholder groups gives an opportunity to compare their perceptions and therefore work toward a consistent reputation. The authors also tested the model of academic reputation as a multidimensional concept.
Design/methodology/approach
– The qualitative stage included 25 in-depth interviews with members of key stakeholder groups. In the quantitative stage, the initial questionnaire was based on the reputational quotient of academic institutions, comprised of 26 items representing eight dimensions of reputation. It was administered among three key stakeholder groups, the general public (n=400), employees of the business school that was the focus of the study (n=154), and fourth year students of the school (n=446).
Findings
– Confirmatory factor analysis indicated that criteria applied by various stakeholder groups were similar, but the model of academic reputations as a multidimensional concept was not confirmed. The theoretical assumption of an eight factor solution for the concept of academic institutions was not supported. It seems that, in this particular case, only one main dimension emerged. Theoretically, that implies a general factor determining overall reputations across stakeholders.
Research limitations/implications
– Future research should apply a new, reduced questionnaire in multiple academic organizations and try to avoid some of the limitations such as differing methods of data collection, and ensure complete anonymity for all respondents.
Practical implications
– This study offers input for the development of a robust and general questionnaire that could be developed to be used across organizations and their publics.
Originality/value
– The study demonstrates that reputation is a unidimensional construct and that it should also be measured as such.
Companies increasingly communicate about corporate social responsibility (CSR) through interactive online media. We examine whether using such media is beneficial to a company's reputation. We ...conducted an online experiment to examine the impacts of interactivity in CSR messages on corporate reputation and word-ofmouth intentions. Our findings suggest that an increase in perceived interactivity leads to higher message credibility and stronger feelings of identification with the company, which also boost corporate reputation and word-of-mouth. This result implies that using interactive channels to communicate about CSR can improve corporate reputation. Our results also show that the detrimental impacts of negative user evaluations on corporate reputation are much higher than the favorable impacts of positive evaluations. This finding suggests that, despite the effectiveness of interactive communication channels, firms need to carefully monitor these channels.
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