The impact of prior firm financial performance on subsequent corporate reputation
Sue Annis Hammond, John W. Slocum Jr.
Journal of Business Ethics · 1996 · Volume 15 · Issue 2
Abstract
This study links corporate reputation, as measured byFortunemagazine's Most Admired list, with firm financial performance. Seven measures of financial risk and return were collected for a sample of 149 firms from two time periods, 1981 and 1986. The mean score of four attributes from the 1993FortuneMost Admired list for the sample was then analyzed with the financial data through regression analysis. Two financial variables, Standard Deviation of the Market Return of the Firm and Return on Sales, explained between 0.12 and 0.14 of subsequent reputation. The implication for management is that they can affect a firm's subsequent reputation by lowering financial risk and controlling costs.
Keywords
Standard Deviation, Regression Analysis, Economic Growth, Financial Performance, Financial Data
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