Well Known or Well Liked? The Effects of Corporate Reputation on Firm Value at the Onset of a Corporate Crisis

• 成果类型: Article
• 署名作者: Wei, Jiuchang; Ouyang, Zhe; Chen, Haipeng (Allan)
• 署名单位: Chinese Academy of Sciences; University of Science & Technology of China, CAS; Texas A&M University System; Texas A&M University College Station; Mays Business School
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2639
• 发表日期: 2017
• 页码: 2103-2120
• 关键词: corporate reputation; Crisis management; SHAREHOLDER VALUE; attribution of crisis responsibility; investors

摘要

We study how two dimensions of reputation (i.e., generalized favorability and being known) and attribution of crisis responsibility affect firm value at the onset of a crisis. Analyzing 126 corporate crises befalling publicly listed firms in China from 2008 to 2014, we find that generalized favorability serves as a buffer; while being known can be a burden, in influencing firm value. We also find that the buffering effect of generalized favorability is stronger when the attribution of crisis responsibility is low (vs. high). In addition, there is a negative interaction effect between the two dimensions of reputation such that the buffering effect of generalized favorability weakens when firms are better known. We discuss our contributions to research on corporate reputation and crisis management. Managerial summary: Corporate reputation is an intangible asset, especially at the onset of a corporate crisis. This research sheds light on the double-edged sword of corporate reputation by examining the effects of two reputation dimensions (i.e., being liked and being known) on firm value. Our results suggest that well-liked firms can leverage their generalized favorability among stakeholders to assuage firm value loss, whereas well-known firms may have to better communicate with stakeholders to overcome the burden of stakeholders' attention that escalates firm value loss. To better cope with the onset of a crisis, firms should therefore enhance their generalized favorability and simultaneously avert stakeholders' excessive attention. In addition, well-liked firms can further buffer against the loss in firm value by reducing the perceived intentionality of a crisis. Copyright (C) 2017 John Wiley & Sons, Ltd.