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Impact of the Reputation Quotient® on Investment Performance

Author

Listed:
  • Thomas M Krueger

    (Texas A&M University)

  • Mark A Wrolstad

    (Winona State University)

Abstract

Reputation Quotients (RQs®) produced by Harris Interactive, Inc. are a presumed credible measure of corporate reputation that assesses corporate reputations employing six drivers, which are correlated with 20 attributes. Reputations appear to be an important characteristic of a firm, which transcends a company’s current production and financial statements to set a path for future performance. Although many years and multiple factors go into creating a reputation, this study found that past share price performance was unrelated to company reputation. However, reputation does appear to provide insight into future firm performance. Firms with the worst reputations often seem to have trouble providing a return sufficient to cover risk, especially in the absence of dividends. By comparison, firms with the best reputations tend to have lower risk, whether measured in terms of systematic risk or total risk, and therefore generate significantly higher risk-adjusted rates of return.

Suggested Citation

  • Thomas M Krueger & Mark A Wrolstad, 2016. "Impact of the Reputation Quotient® on Investment Performance," Corporate Reputation Review, Palgrave Macmillan, vol. 19(2), pages 140-151, April.
    • Handle: RePEc:pal:crepre:v:19:y:2016:i:2:d:10.1057_crr.2016.5
    DOI: 10.1057/crr.2016.5
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    Citations

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    Cited by:

    1. M. M. D. De S. Gunawardena & R. Senathiraja & S. Buvanendra, 2021. "Corporate Reputation and Subsequent Financial Performance: A Theoretical Explanation of the Mediating Role of Trust," International Journal of Business and Management, Canadian Center of Science and Education, vol. 14(11), pages 209-209, July.
    2. Eman Ismail & Yasser Tawfik Halim & Mohamed Samy EL-Deeb, 2023. "Corporate reputation and shareholder investment: a study of Egypt's tourism listed companies," Future Business Journal, Springer, vol. 9(1), pages 1-15, December.
    3. Salman Khan & Jacques Digout, 2018. "The Corporate Reputation Reporting Framework (CRRF)," Corporate Reputation Review, Palgrave Macmillan, vol. 21(1), pages 22-36, February.

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