Using data from China’s public debt markets, we study the value of corporate reputation and how it interacts with legal and cultural forces to assure accountability. Exploring lawsuits that change corporate reputation, we find that firms involved in lawsuits experience a decrease in bond values and a tightening of borrowing terms. Using the heterogeneities in legal and social capital environments across Chinese provinces, we find the effects are more pronounced for private firms, firms headquartered in provinces with low (...) legal protections, and firms headquartered in provinces with high social capital. The results show that lawsuits that allege misconduct are associated with reputational penalties and that such penalties serve as substitutes for legal protections and as complements to cultural forces to provide ex post accountability and motivate ex ante trust. (shrink)

We analyze whether audit partners suffered damage to their professional reputations with the demise of Zhongtianqin, formerly the largest audit firm in China, after an audit failure enabled a major client, Yinguangxia, to fraudulently exaggerate its earnings in a high-profile scandal resembling the Andersen–Enron events in the US. This involves evaluating whether the reputational damage sustained by partners implicated in the scandal spreads to other partners in the same audit firm. We isolate whether impaired reputation impedes partners who were (...) not complicit in the ZTQ–YGX events from attracting new clients or keeping existing ones. Our evidence implies that the market shares of these partners fell after ZTQ’s collapse, supporting that guiltless partners’ reputations were tarnished. We also find that these partners are less likely to be employed by reputable audit firms. The clients of these partners tend to have lower earnings response coefficients, implying that investors downgrade the perceived quality of their audits. Moreover, compared to a matched sample, the former ZTQ partners tend to charge lower audit fees after the firm’s collapse. Finally, we exploit the unique structure of ZTQ to provide evidence consistent with the prediction that the former partners from the branch that handled the YGX audits experienced worse damage to their reputations. In a setting with minimal auditor discipline stemming from civil litigation, our results lend support to the intuition that partners’ reputation concerns motivate them to protect audit quality by closely monitoring other partners in the firm. (shrink)

Rules 405(a) and 608(a) of the Federal Rules of Evidence allow the use of testimony about a witness’s reputation to support or undermine his or her credibility in trial. This paper analyzes the evidential weight of such testimony from the point of view of social epistemology and the theory of social networks. Together they provide the necessary elements to analyze how reputation is understood in this case, and to assess the epistemic foundation of a reputational attribution. The (...) result of the analysis will be that reputational testimony is extremely weak from an epistemological point of view, and that in many cases there are more reliable substitutes that achieve a similar purpose. The obvious fix, in my view, is to eliminate the use of reputation testimony to support or undermine the credibility, honesty, chastity or peacefulness of a witness. (shrink)

This study investigates the persuasive advertising and informative advertising effects of CSR initiatives on corporate reputation and brand equity based on the evidence from the life insurance industry in Taiwan. The study finds, first, policyholders’ perceptions concerning the CSR initiatives of life insurance companies have positive effects on customer satisfaction, corporate reputation, and brand equity. Second, the advertising effects of the CSR initiatives on corporate reputation are only informative. Third, the impacts of CSR initiatives on brand (...) equity include informative advertising and persuasive advertising effects. This study contributes the literature by explicit defining the advertising effects of CSR initiatives. Following the first step made by McWilliams et al. (Journal of Management Studies 43(1):1–18, 2006 ), the hypotheses of this study crystallize their conceptual framework. The obtained results in this research first identify the informative advertising effects and persuasive advertising effects of CSR initiatives. (shrink)

Previous experimental and observational work suggests that people act more generously when they are observed and observe others in social settings. However, the explanation for this is unclear. An individual may want to send a signal of her generosity to improve her own reputation. Alternately (or additionally) she may value the public good or charity itself and, believing that contribution levels are strategic complements, give more to influence others to give more. We perform the first series of laboratory experiments (...) that can separately estimate the impact of these two social effects, and test whether realized influence is consistent with the desire to influence, and whether either of these are consistent with anticipated influence. Our experimental subjects were given the opportunity to contribute from their endowment to Bread for the World, a development NGO. Depending on treatment, “leader” subjects’ donations were reported to other subjects either anonymously or with their identities, and these were reported either before these “follower” subjects made their donation decisions. We find that “leaders” are influential only when their identities are revealed along with their donations, and female leaders are more influential than males. Identified leaders’ predictions suggest that are aware of their influence. They respond to this by giving more than either the control group or the unidentified leaders. We find mixed evidence for “reputation-seeking.”. (shrink)

Much work on intellectual humility has focused on its epistemic benefits. We suggest that displaying (or failing to display) intellectual humility also has effects on how others perceive us and that, as a result, intellectual humility can serve reputation management purposes, in at least four ways: (i) Intellectual humility can be used to signal we are a good source of information; (ii) Intellectual humility can be used to signal we are competent through countersignaling; (iii) Intellectual humility can be used (...) to make sure others do not believe we are overclaiming superiority; (iv) lack of intellectual humility (or intellectual arrogance) can be used to signal dominance. The evidence suggests that intellectual humility (or lack thereof) can have each of these effects. Seeing intellectual humility as (inter alia) a reputation management tool predicts that people will be more or less likely to display intellectual humility in some contexts. For instance, people in a position of power might stand to lose less if they fail to be intellectual humble; accordingly, evidence suggests that they tend to display less intellectual humility. In conclusion, we speculate that understanding intellectual humility as reputation management could help construct environments more conducive to displays of intellectual humility. (shrink)

In many contexts, such as business, science and law, it is essential to determine whether a company, a product or a person in fact has the reputation attributed to it, regardless of whether that reputation has been rightly earned. In this paper I offer two necessary and jointly sufficient conditions for the attribution of a reputation to a subject within a social group. The first one concerns the way in which reputational information is spread among the members (...) of the relevant social group; the second is the existence, in most members of the group, of a disposition to interpret and evaluate a reputational object in a manner molded by reputational information. Reputational claims generate expectations that are tested every time a member of the group comes in contact with the reputational object. In many cases, the preferential search for behavioral evidence consistent with those expectations will result in a distorted evaluation of the reputational object. (shrink)

There is a tension between the reasonable desire not to be judgmental of other people’s behaviour or character, and the moral necessity of making negative judgments in some cases. I sketch a way in which we might accommodate both, via an evaluation of the good of reputation and the ethics of judgment of other people’s character and behaviour. I argue that a good reputation is a highly valuable good for its bearer, akin to a property right, and not (...) to be damaged without serious reason deriving from the demands of justice and the common welfare. Rash judgment wrongfully damages reputation and is sometimes a seriously immoral act. Rashness is not merely about lack of evidence, but involves lack of charity and is to be avoided even in some cases where the evidence of bad character or action is epistemically sufficient for judgment. I argue that the desirability of a good name for its holder, whether the reputation is deserved or not, means that in all but a relatively narrow range of cases it is always wrong to think badly of someone, even if they are bad. (shrink)

Howard S. Becker is a master of his discipline. His reputation as a teacher, as well as a sociologist, is supported by his best-selling quartet of sociological guidebooks: Writing for Social Scientists, Tricks of the Trade, Telling About Society, and What About Mozart? What About Murder? It turns out that the master sociologist has yet one more trick up his sleeve—a fifth guidebook, Evidence. Becker has for seventy years been mulling over the problem of evidence. He argues (...) that social scientists don’t take questions about the usefulness of their data as evidence for their ideas seriously enough. For example, researchers have long used the occupation of a person’s father as evidence of the family’s social class, but studies have shown this to be a flawed measure—for one thing, a lot of people answer that question too vaguely to make the reasoning plausible. The book is filled with examples like this, and Becker uses them to expose a series of errors, suggesting ways to avoid them, or even to turn them into research topics in their own right. He argues strongly that because no data-gathering method produces totally reliable information, a big part of the research job consists of getting rid of error. Readers will find Becker’s newest guidebook a valuable tool, useful for social scientists of every variety. (shrink)

Trust online can be a hazardous affair; many are trustworthy, but some people use the anonymity of the web to behave very badly indeed. So how can we improve the quality of evidence for trustworthiness provided online? I focus on one of the devices we use to secure others’ trustworthiness: tracking past conduct through online reputation systems. Yet existing reputation systems face problems. I analyse these, and in the light of this develop some principles for system design, (...) towards overcoming these challenges. In providing better evidence for trustworthiness online, so we can also encourage people actually to be trustworthy more often, which is an ethically welcome outcome. (shrink)

We propose a construct, the Trust Triangle, that highlights three primary mechanisms that provide ex post accountability for opportunistic behavior and motivate ex ante trust in economic relationships. The mechanisms are a society’s legal and regulatory framework, market-based discipline and reputational capital, and culture, including individual ethics and social norms. The Trust Triangle provides a framework to conceptualize the relationships between trust, corporate accountability, legal liability, reputation, and culture. We use the Trust Triangle to summarize recent developments in the (...) empirical finance literature that examine how trust is formed and how trust, or its absence, affects financial markets, firm performance, and the incidence of financial fraud. To date, most studies examine only one leg of the Trust Triangle in isolation. The evidence, however, indicates that all three legs of the Trust Triangle have first-order effects on a wide range of financial outcomes and that they are interrelated. Attempts to model trust and trustworthiness that do not incorporate all three aspects of the Trust Triangle will therefore miss essential aspects of the basic economic problem of how counterparties overcome the risks of moral hazard, asymmetric information, and opportunism to engage in mutually beneficial exchange and production activities. We focus especially on culture-related mechanisms, a recently developed area in empirical finance research that has potential to influence the more established research on laws and reputation. (shrink)

This study argues that actions taken during a crisis within the responsibility compass impacts reputation. The lens of responsible leadership was chosen from among the different foci of leadership scholarship because of its emphasis on relational and ethical dimensions. The focus of this study was the actions undertaken by the CEOs of United and Delta Airlines after the forceful removal of the passengers and its influence on the reputation capital as measured by the changes in the respective share (...) prices of the airlines. The overarching question was whether there was clear statistical evidence that linked the actions undertaken as part of the crisis management efforts and the reputation of the airlines. Findings from this study suggest that actions taken as part of responsible leadership compass explained the variations in the share prices. In the case of United Airlines almost 70% of the variations in the share prices could be explained by responsible leadership, whereas in the case Delta airlines only 50.6% of the variations in the share value could be predicted based on the role of leadership in crisis management. (shrink)

Prior research suggests that the media plays an important information intermediary role in capital markets. We investigate the role of the media in influencing firms’ engagement in corporate social responsibility activities. Using a large sample of 4396 unique firms from 42 countries over the period 2003–2012, we find strong evidence that firms engage in more CSR activities if located in countries where the media has more freedom. This relation is robust to using various proxies for media freedom, an alternative (...) source of CSR data, and to applying the instrumental variables approach to address endogeneity. In additional analyses, we find that the positive relation between media freedom and CSR engagement is stronger for better governed firms and for larger firms. Since the media have the ability to impact reputational capital, we conclude that media freedom affects firms’ incentives to engage in costly CSR activities. (shrink)

Research in various disciplines has highlighted that humans are uniquely able to solve the problem of cooperation through the informal mechanisms of reputation and gossip. Reputation coordinates the evaluative judgments of individuals about one another. Direct observation of actions and communication are the essential routes that are used to establish and update reputations. In large groups, where opportunities for direct observation are limited, gossip becomes an important channel to share individual perceptions and evaluations of others that can be (...) used to condition cooperative action. Although reputation and gossip might consequently support large-scale human cooperation, four puzzles need to be resolved to understand the operation of reputation-based mechanisms. First, we need empirical evidence of the processes and content that form reputations and how this may vary cross-culturally. Second, we lack an understanding of how reputation is determined from the muddle of imperfect, biased inputs people receive. Third, coordination between individuals is only possible if reputation sharing and signaling is to a large extent reliable and valid. Communication, however, is not necessarily honest and reliable, so theoretical and empirical work is needed to understand how gossip and reputation can effectively promote cooperation despite the circulation of dishonest gossip. Fourth, reputation is not constructed in a social vacuum; hence we need a better understanding of the way in which the structure of interactions affects the efficiency of gossip for establishing reputations and fostering cooperation. (shrink)

In January 1729 a paper written by James Bradley was read at two meetings of the Royal Society. On a newly discovered motion of the fixed stars, later described as the theory of the aberration of light, it was to transform the science of astrometry. The paper appeared as a narrative of a programme of observation first begun at Kew and finalized at Wanstead, but it was, in reality, a careful reconstruction devised to enhance his reputation in response to (...) a recognition that the programme was initially conducted in terms that were inimical to what he conceived to be his interest. The planned attempt to repeat Robert Hooke's celebrated experiment by James Pound, Samuel Molyneux and George Graham was set up at Molyneux's residence in Kew with James Bradley replacing Pound after his untimely and sudden demise. The unexpected and counterintuitive behaviour of the object star γ Draconis and the eradication of any suspicion of instrumental or systemic error led to the abandonment of the attempt to measure annual parallax and the initiation of new conjectures. An annual nutation was proposed but after the observation of a control star, 35 Camelopardalis, this conjecture was abandoned. Unknown to Bradley and Graham a premature approach was made by Molyneux to Newton claiming that the ‘nutation’ negated the whole of Newton's system. In the abandonment of the nutation yet another conjecture opposed to Newtonian theory was proposed and abandoned. Bradley determined to use his own instrument designed on different principles by Graham to observe the phenomenon in Wanstead. At Wanstead Bradley observed many stars to determine the parameters of the phenomenon. With the law of the motion described, Bradley proposed a hypothesis to explain it. Drawn from his earlier work on the ephemerides of Jupiter's satellites his hypothesis of the ‘new-discovered motion’ was quickly presented to the Royal Society as Bradley was working on a later and more definitive version of his paper. It is this later, third, unpublished version that is commonly referred to throughout this essay. It issued a challenge to ‘anti-Copernicans’ to offer an explanation of the observed phenomenon in geostatic terms. One such astronomer, Eustachio Manfredi, had examined the phenomenon of ‘aberrations’ in detail, the term being his. It was Bradley who first applied the term to the ‘new-discovered motion’ and within a short time ‘aberration’ was being applied by astronomers in the reduction of their observations. Annual aberration was widely accepted as evidence of the motion of the Earth. The paper enhanced Bradley's reputation and projected him into the forefront of European astronomers. (shrink)

Across a variety of situations, people strongly condemn plagiarizers who steal credit for ideas, even when the theft in question does not appear to harm anyone. Why would people react negatively to relatively harmless acts of plagiarism? In six experiments, we predict and find that these negative reactions are driven by people's aversion toward agents who attempt to falsely improve their reputations. In Studies 1–3, participants condemn plagiarism cases that they agree are harmless. This effect is mediated by the extent (...) to which participants perceive the plagiarizer to have falsely benefitted from plagiarizing. In Studies 4–5, we demonstrate that this effect is not explained solely by participants’ negative response to lies or violations of permission. In Study 6, participants condemn a plagiarism case in which the idea's original author actually benefits, providing the strongest evidence that people condemn plagiarism for reasons beyond perceived harm. We discuss how this work connects to broader questions of intellectual property and impression management. (shrink)

Banks face a dilemma in choosing between maximising profits and facilitating the sustainable use of resources within a carbon-constrained future. This study provides empirical evidence on this dilemma, investigating whether a bank loan announcement for a firm with high carbon risk conveys information to investors about the firm’s carbon risk exposure collected through a bank’s pre-loan screening and ongoing monitoring. We use a sample of 120 bank loan announcements for ASX-listed firms over the period 2009–2015. We measure high carbon (...) risk exposure based on whether firms meet the reporting threshold of the NGER scheme. We document positive and significant excess loan announcement returns for loan renewals for high carbon risk firms, but not for loan initiations. Further, we document a more significant loan announcement return for renewals with favourable term revisions. Finally, we find no evidence that the market differentiates between domestic and foreign lenders. Taken together, our results suggest that investors perceive that banks incorporate carbon risk considerations into their lending decisions. Our results highlight the value of banks as financial intermediaries given the information asymmetry surrounding firms’ carbon risk exposure, and more generally the need to extend modern banking theory to consider issues such as the impact of banks’ CSR reputation on lending decisions. (shrink)

A strong record of human rights protections is an important factor for a state to maintain a positive international reputation. In this article, we suggest that states will use compliance with human rights treaties as a mechanism by which to improve their reputations to help achieve their foreign policy goals. We hypothesize that international human rights compliance is a means to improve a state’s reputation in three specific situations: when the state is facing regional pressures as the result (...) of a desire to join a regional organization; when the state is facing regional pressures not to run afoul of a court within a regional organization; or when a state seeks foreign assistance from an entity with human rights requirements for the receipt of such assistance. We examine our theory by analyzing human rights reports regarding state compliance with specific treaty obligations outlined in the Convention Against Torture (CAT). While the evidence for our hypotheses is mixed, we do find some support for our assertion that state compliance is linked to reputational concerns. In particular, states comply with the CAT when they are part of a regional organization that has a human rights court, and when they are receiving conditional aid from the European Union. (shrink)

Even though the link between perceived corporate social responsibility fit and corporate reputation has received much attention from scholars, this tradition has ignored that the underpinnings of this association vary depending on the particular characteristics of each industry under study. To delve into this matter, we investigate in the increasingly relevant context of controversial industries how PCSR-fit could enhance corporate reputation and which are the mediating mechanisms of this association. Our academic contribution is twofold. First, we find that (...) controversial sectors indeed can increase corporate reputation through CSR activities. However, we find that to achieve this goal, the nature of PCSR-fit should be different than what extant literature indicates, because companies in these settings should directly focus on avoiding or reducing their inherent controversial harm or impact. Second, we evidence that “CSR initiatives' legitimacy” and “situational skepticism” mediate the PCSR-fit and corporate reputation relationship in CIs. Therefore, we further unravel the underpinnings of this association to advance what we know on the matter and aid practitioners in this particular context. (shrink)

Strong reciprocity is not the only account that can explain costly punishment in the lab; it can also be explained by reputation-based accounts. We discuss these two accounts and suggest what kinds of evidence would support the two different alternatives. We conclude that the current evidence favors a reputation-based account of costly punishment.

We investigate the effectiveness of corporate social responsibility disclosure in protecting corporate reputation following financial restatements. As expected under legitimacy theory, firms can signal their legitimacy via nonfinancial disclosure after the negative effects of financial restatements. Our results show that restating firms make substantial improvements to overall CSR disclosure quality by changing their standalone reports to a more conservative tone, increasing readability and report length, even though they strategically disclose less forward-looking and sustainability-related content. Such improvements are more pronounced (...) in restating firms with prior low-quality CSR disclosure. Moreover, restating firms with CSR disclosure have smaller forecast errors than non-CSR disclosers, yet the change in CSR disclosure after restatements does not further improve analyst forecast accuracy. Finally, we find that compared with nondisclosers, restating firms with CSR disclosure suffer smaller firm value losses. Overall, the evidence supports the view that consistent CSR reporting alleviates reputational damage and plays an insurance-like or value protection role during crisis periods. (shrink)

Using a national survey of US consumers, this study demonstrates the positive effects of corporate social responsibility communication factors on consumers’ CSR knowledge, trust, and perceptions of corporate reputation. The study also examines the role of a stakeholder-specific factor of consumer–company identification in the process of CSR communication. The findings suggest that the positive effects of CSR informativeness are enduring and independent of consumers’ identification levels with a company, whereas the positive consequences of the personal relevance, transparency, and factual (...) tone of CSR communication intensify as the identification levels increase. Although CSR communication in which a self-promotional tone is adopted has a negative relationship with consumer trust and corporate reputation, such negative effects are not evident among consumers with very high identification levels with a company. Such CSR communication in fact improves consumers’ CSR knowledge and, in turn, has a positive effect on corporate reputation. (shrink)

We use the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission to assess the reputational risks created by political investment opportunities that allow managers to spend unlimited and potentially undisclosed firm resources on independent political expenditures. This new opportunity raises important ethical questions, as it is difficult, and perhaps impossible, under current law for shareholders to hold managers accountable for this investment choice and the reputational risks it entails. Using firms’ known political activity as a proxy for (...) managers’ likely future use of independent political expenditures, we examine how market participants reacted to Citizens United, conditional on this prior activity and corporate governance attributes related to the concentration of decision rights in senior management and blockholders. The results of our analyses document that firms with both a high level of known political activity and CEO-chairperson of the board duality experienced negative abnormal returns in reaction to Citizens United. In contrast, firms with concentrated ownership experienced positive abnormal returns; however, as known political activity increased, investors discounted the benefits of concentrated ownership. These findings suggest that investors expect this expansion of firms’ political investment opportunities to amplify principal-agent problems inherent in corporate political activity. Additionally, our findings provide evidence for those deliberating the mandatory disclosure of firms’ investments in politics as a means of increasing managerial accountability to both shareholders and the public. (shrink)

It is often assumed that corporate social responsibility is a very promising way for corporations to improve their reputations, and a positive link between practicing CSR and corporate reputation is supported by empirical evidence. However, little is known about the mechanisms that underlie this relationship. In addition, the effects of not practicing CSR on corporate reputation have received little attention thus far. This paper contributes to the literature by analyzing the cause-and-effect relationships between practicing CSR and corporate (...) reputation. To this end, the paper draws on a psychological framework, in particular, on insights from expectancy violations theory and attribution theory. Building on the ideal-type distinction between CSR in terms of voluntary engagement for society and the prevention of irresponsible behavior, the paper develops four propositions that unveil some fundamental cause-and-effect relationships between practicing CSR, irresponsible behavior, and corporate reputation. In doing so, it also addresses the question under which conditions CSR leads to a buffering or backfiring effect on corporate reputation in the event of irresponsible behavior. (shrink)

This study examines the impact of corporate tax avoidance on board of directors and chief executive officer reputation. Our regression results show that when firms engage in tax avoidance, both directors and CEOs, on average, are rewarded by improvements in their reputations as proxied by an increased number of outside board seats. In particular, both independent directors and non-CEO executive directors undergo positive changes in reputation. We also find that CEOs of tax-aggressive firms experience enhanced reputations by gaining (...) extra board seats. Our main regression results hold based on additional analyses. Overall, this study provides important empirical evidence confirming an association between tax avoidance and the individual reputations of directors and CEOs. (shrink)

This paper examines the impact of corporate social responsibility disclosure on corporate reputation as perceived by non-professional stakeholders. Proponents of CSR disclosure argue that CSR disclosure can be considered as a tool for reputation management. We empirically investigate this claim using a reputation index which tracks the general public’s perceptions of corporate reputation over time. In our analysis, we focus on disclosure in stand-alone CSR reports and control for CSR performance. We find that, in contrast to (...) the common belief, stand-alone CSR reports do not influence corporate reputation among non-professional stakeholders. However, we are able to document that stand-alone CSR reports influence corporate reputation among professional stakeholders. We also provide some evidence that transparent CSR disclosure on corporate websites can influence corporate reputation among non-professional stakeholders. (shrink)

When faced with the threat of negative reputation spillover from an alliance partner accused of environmental misconduct, the focal firm must decide whether to adopt a supportive or non-supportive response. We argue that this decision denotes a commitment escalation dilemma, but that factors previously found to increase escalation tendencies lead to de-escalation in our crisis contagion context. Specifically, we derive four hypotheses from this reverse effect proposition, and test these using a policy-capturing survey targeting Norwegian CEOs. We found that (...) firms are more likely to select an adversary response when the alliance is of high strategic importance and has high termination costs. Conversely, firms are more likely to select an advocacy response when the alliance is of low strategic importance and has low termination costs and when the CEO was not involved in the formation of the alliance. Overall, our study answers a call for a more nuanced understanding of commitment escalation and the theory’s boundary conditions by introducing reputation spillover crisis as a contextual influencer of escalation behavior. It also extends the reputation literature and provides new evidence that reputation concerns can instigate ethical decision-making. (shrink)

There is theoretical and empirical evidence that firms’ environmental performance has ramifications for their appeal to various stakeholders. Yet, we know little about how this plays out in the context of strategic alliance formation. Stated differently, research is lacking on how ‘green’ prospective alliance partners are estimated by the initiating firm. This article employs strong environmental reputation as a proxy for high environmental performance and explores implications for the well-established alliance formation trust-based mechanism, under the strategic cognition perspective. (...) The ensuing hypotheses are subjected to empirical scrutiny through an experimental method. A random sample of 138 CEOs and top managers of Norwegian manufacturing firms completed a scenario-based questionnaire. The results show that two out of three trust dimensions are affected and, moreover, that two out of three—but not the same—trust dimensions influence partner attractiveness. Several theoretical and managerial implications, and future research opportunities, are derived from the findings. (shrink)

Ample sociological evidence demonstrates that binary gender ideologies are an intractable part of formal organizations and that transgender issues tend to be marginalized by a wide range of social institutions. Yet, in the last 15 years, more than 200 colleges and universities have attempted to ameliorate such realities by adopting gender-inclusive facilities in which students of any gender can share residential and restroom spaces. What cultural logics motivate these transformations? How can their emergence be reconciled with the difficulty of (...) altering the gender order? Using an original sample of 2,036 campus newspaper articles, I find that support for inclusive facilities frames such spaces as a resource through which an institution can claim improved standing in the field of higher education. This process of engendering reputation allows traditional gender separation in residential arrangements to be overcome, but it also situates institutional responsiveness to transgender issues as a means of enhancing a college or university’s public prestige. This, in turn, produces novel status systems in the field of higher education—albeit ones that perpetuate familiar forms of institutional and cultural exclusion. (shrink)

The recent financial crisis has triggered an intense debate about the role of banks in society, presumably changing the criteria used in the evaluation of organizations. Against this backdrop, we investigate the changing role of banks’ organizational features in shaping different dimensions of banks’ organizational reputation. Using the media as an important evaluator, we measure the reputational dimension of visibility based on the frequency of newspaper articles and the reputational dimension of favorability based on the sentiment of newspaper articles. (...) Drawing on social judgment research for developing our hypotheses, we expect that organizational features such as financial performance and familiarity become more important determinants of organizational reputation in times of crisis. Our results support this expectation, suggesting stronger effects of these organizational features on the visibility and favorability of banks during a crisis. These findings provide novel empirical evidence on how the importance of drivers of organizational reputation changes in times of crisis and highlight areas for managerial attention. (shrink)

Technological developments and changes in communication systems in postmodern world have enhanced the organizations to improve their own communication infrastructures and to effectively use their internet sites. Like all other organizations, sport club institutions have considered the vital importance of investing in social media activities and creating their corporate reputation through their connections with their supporters. Thus, social media channels and public relations via social media have been the most essential tools of the organizations to build company image and (...) increase their corporate reputation among the stakeholder groups, particularly their supporters. Taking into account the suggested influence of effective use of social media on building corporate reputation, the current study examined the relationship between supporters’ social media usage frequency and their perceptions of corporate reputation. A cross-sectional research design has been applied in order to obtain data about the corporate reputation perception levels and social media usage frequencies of the supporters as well as the demographic characteristics of the participants. The sample group was composed of 782 participants and data obtained was examined by executing statistical analyses. The findings revealed that individuals’ social media usage frequency has positive effect on the perceived corporate reputation. In addition, demographic differences were observed in terms of the social media usage frequency and corporate reputation perception. Consequently, the results of the study were discussed in the light of the conceptual background and the previous empirical evidences. The managerial and conceptual implications of the study were evaluated and future directions were presented. (shrink)

We investigate the impact of perceived greenwashing on customer satisfaction. Unlike prior research that largely examines customer perceptions associated with irresponsible behavior, we focus on cases where firms overcommit and/or do not deliver on promised socially responsible actions. We theorize that this type of greenwashing is associated with lower customer satisfaction because customers perceive greenwashing through the lens of corporate hypocrisy. Using data from the American Customer Satisfaction Index (ACSI) for U.S. companies during the period 2008–2016, we document a negative (...) link between perceived greenwashing related to green product innovation (GPI) and the ACSI index. We demonstrate that this effect is primarily triggered by corporate policies exceeding the corresponding implementation actions and not by lower levels of implementation. We also show that a firm’s capability reputation mitigates the negative effect of greenwashing on customer satisfaction. Moreover, we conduct an experiment and provide evidence confirming that GPI greenwashing is in fact perceived by customers as corporate hypocrisy. (shrink)

This paper examines the association between corporate philanthropy and tunneling by controlling shareholders. Using a unique dataset from China, the paper finds evidence that firms donating more are less likely to tunnel. The negative association between philanthropy and tunneling is stronger when firms are faced with more severe agency conflicts, as indicated by lower largest shareholding, fewer growth opportunities, lower state ownership, and weaker product market competition. The results suggest that companies engaging in philanthropy have incentives to enhance their (...) reputations and improve their relationships with stakeholders. (shrink)

Overconfidence is typically damaging to one’s reputation as a trustworthy source of information. Previous research shows that the reputational cost associated with conveying a piece of false information is higher for confident than unconfident speakers. When judging speaker trustworthiness, individuals do not exclusively rely on past accuracy but consider the extent to which speakers expressed a degree of confidence that matched the accuracy of their claims (their “confidence-accuracy calibration”). The present study experimentally examines the interplay between confidence, accuracy and (...) a third factor, namely evidence, in the assessment of speaker trustworthiness. Experiment 1 probes the hypothesis that overconfidence does not backfire when a confident but inaccurate claim is justified: the trustworthiness of a confident speaker who turns out to be wrong is restored if the confidence expressed is based on strong evidence (good confidence-evidence calibration). Experiment 2 investigates the hypothesis that confidence can backfire if a confident and accurate claim is not justified: the trustworthiness of a confident speaker who turns out to be right is damaged if the confidence expressed is based on weak evidence (bad confidence-evidence calibration). Our results support both hypotheses and thus suggest that “confidence-evidence calibration” plays a crucial role in the assessment of speaker trustworthiness. (shrink)

Gender researchers have only recently begun to identify how women perceive and explain the costs and benefits associated with different femininities. Yet status hierarchies among historically white college sororities are explicit and cannot be ignored, forcing sorority women to grapple with constructions of feminine worth. Drawing on interviews with women in these sororities, we are able to capture college women’s attitudes toward status rankings that prioritize adherence to narrow models of gender complementarity. Sorority chapters were ranked according to women’s perceived (...) heterosexual appeal to elite men. Women believed that top-ranked sororities conferred social power whereas middle- and bottom-ranked sororities offered greater freedom from policing over members’ bodies, fashion, and socializing. However, middle- and bottom-ranked sororities sometimes sought to rise in the rankings. When this occurred, existing members were marginalized, and a new pledge class with a greater tolerance for socializing with high-status “rapey” fraternities was sought. Women’s discussions of sorority rankings show evidence of a hybrid femininity that fuses practices from traditional models of gender complementarity and more recent models of women’s empowerment. (shrink)

We explore the relationship between corporate sustainability, reputation, and firm value by asking whether signaling sustainability leadership through membership on a recognized sustainability index is value generating. Increasingly, stakeholders are demanding that firms demonstrate their commitment to sustainability. One signal that companies can send to stakeholders to indicate that they are sustainability leaders is membership on a recognized “best in class” sustainability index. This article explores both the short-term and the intermediary impact on North American firms of being included (...) or removed from the Dow Jones Sustainability World Index (DJSI). Our results provide evidence that being added to the DJSI results in a sustained increase in a firm’s share price, suggesting that the benefits of being included on the DJSI outweigh the costs associated with applying. This article also notes a temporary decrease in the value of firms for the first 10 days after their removal from the DJSI; however, this effect is eliminated within the next ten trading days. (shrink)

I challenge the idea by Glowacki that “strong sanctions” such as fines, physical punishment, or execution are more effective in promoting peace than “weak punishments” like social rejection. Reviewing evidence that social rejection can have significant social and psychological costs for norm violators, I propose that social rejection can serve as a powerful reputational sanction in fostering peace in society.

Credible and well-functioning governance is crucial for the value creation of firms. Recently, private sectors have undergone substantial changes by focusing on good governance as a tool to enhance value, reputation, and image. The primary features of firms with good governance include greater emphasis on accountability practices, proper implementation of a corporate integrity system, and sound internal controls in place to avoid risk and to ensure policy and procedures that are complied. Government linked companies (GLCs) as the backbone of (...) the Malaysian Government have been harshly criticised for not being able to create value(s) despite receiving high priority in the process of getting government projects. Therefore, this study aims to examine the role of good governance systems, which are reflected through accountability systems, corporate integrity systems, and internal control systems towards value creation of Malaysian GLCs. This study collected primary data based on a set of questionnaire survey among 100 GLCs in Malaysia. Based on the regression analysis, this study found that corporate integrity systems and internal control systems were vital elements in ensuring value creation in GLCs. (shrink)

In this paper, we challenge the conventional wisdom that high‐quality news reports of questionable corporate business practices will stimulate various marketplace negative responses, which in turn, will pressure management to undertake actions designed to protect the organization's reputation. Analysis is confined to a relatively brief period of bad news relating to Citigroup, Inc. We conclude that while none of the expected negative marketplace responses are evident in widely available news sources, the CEO did exhibit significant concern and instituted a (...) targeted reputation risk management program. In the absence of a concerned CEO, analysts should not, we suggest, expect a management team to respond with reputation‐enhancing corrective action solely as a reaction to negative publicity regarding questionable business practices. (shrink)

This paper argues that multinational corporations face levels of environmental and social responsibility higher than their national counterparts. Drawing on the literatures of stakeholder salience, corporate reputation management, and evidence from the confrontation between Shell and Greenpeace over the Brent Spar, in 1995, two mechanisms – international reputation side effects, and foreign stakeholder salience – are identified and their contribution in creating an environment more restrictive, in terms of environmental and social responsibility, is elaborated on. The paper (...) concludes with discussing the links of the work presented here with a number of ongoing debates within the filed of international business ethics, and the managerial implications of the two mechanisms identified. (shrink)

The aim of this paper is to investigate the relationship between environmental, social, and governance controversies and firm market value. We use a unique dataset of more than 4000 firms from 58 countries during 2002–2011. Primary analysis surprisingly shows that ESG controversies are associated with greater firm value. However, when interacted with the corporate social performance score, ESG controversies are found to have no direct effect on firm value while the interaction appears to be highly and significantly positive. Building on (...) this evidence, we attempt to explore the channels through which CSP may enhance market value. Conducting sample split analysis indicates that higher CSP score has an impact on market value only for high-attention firms, those firms which are larger, perform better, located in countries with greater press freedom, more searched on the Internet, more followed by analysts, and have an improved corporate social reputation. Thus, our findings provide new insights on the role of firm visibility through which firms can profit from their CSP. (shrink)

Prior research suggests that corporate credibility is associated with firm financial performance in developed countries. This article examines whether corporate credibility is related to firm performance using Economic Observer's rating of corporate credibility in China, the largest emerging market in the world. Based on a four-stage valuation model, we find that more reputable and credible firms outperform those with low ratings by almost 20% in 3-year stock returns and have better 3-year net profit margins, return on equity, and sales growth. (...) This study is the first to directly examine the relationship between corporate credibility and firm performance in emerging markets such as China, and our results confirm that firms with high credibility exhibit better financial and market performance at least in the following 3 years. (shrink)

Using a sample of Chinese to-be-listed firms during the period of 2006–2012, this study examines the influence of CEO-auditor dialect sharing (CADS) on pre-IPO audit quality and further investigates the moderating effects of auditor reputation and audit firm industry specialization. On the basis of information in personal identification cards, this study hand-collects data about CADS, and then provides strong and consistent evidence to show that CADS is significantly positively related with discretionary accruals (the inverse proxy for audit quality), (...) suggesting that CADS leads to the collusion between the CEO and the signing auditors, elicits pre-IPO earnings management, and eventually impairs pre-IPO audit quality. Moreover, both auditor reputation and audit firm industry specialization attenuate the positive effect of CADS on discretionary accruals. Furthermore, sensitivity tests suggest that above findings are robust to different measures of CADS and discretionary accruals, and above conclusions still stand after controlling for the endogeneity. Lastly, the findings using the post-IPO sample further validate the negative association between CADS and pre-IPO audit quality. (shrink)

We examine the effect of the cross-border merger and acquisition (M&A) activities of Chinese firms on their corporate social responsibility (CSR) performance. We find that Chinese acquirers significantly increase CSR performance and CSR spending following cross-border M&As. The legal origins and social norms of host countries are found to positively affect the acquirers’ CSR performance and CSR spending in the post-M&A period. The results are consistent with Chinese acquirers signaling their commitment toward CSR through cross-border M&As to respond to diverse (...) stakeholder demands and strengthen corporate reputation. We also provide evidence that Chinese firms’ knowledge acquisition through cross-border M&As boosts green innovation. In addition, we show that the financial performance of Chinese acquirers does not suffer in the long term, indicating that strategic CSR investments can be integrated with other corporate investment activities. Our study demonstrates how cross-border M&As affect stakeholder value beyond value for shareholders. (shrink)

Many epistemological terms, such as investigation, inquiry, argument, evidence, and fact were established in law well before being associated with science. However, while legal proof remained qualified by standards of ‘moral certainty’, scientific proof attained a reputation for objectivity. Although most forms of legal evidence continue to be treated as fallible ‘opinions’ rather than objective ‘facts’, forensic DNA evidence increasingly is being granted an exceptional factual status. It did not always enjoy such status. Two decades ago, (...) the scientific status of forensic DNA evidence was challenged in the scientific literature and in courts of law, but by the late 1990s it was being granted exceptional legal status. This paper reviews the ascendancy of DNA profiling, and argues that its widely-heralded objective status is bound up with systems of administrative accountability. The ‘administrative objectivity’ of DNA evidence rests upon observable and reportable bureaucratic rules, records, recording devices, protocols, and architectural arrangements. By highlighting administrative sources of objectivity, this paper suggests that DNA evidence remains bound within the context of ordinary organisational and practical routines, and is not a transcendent source of ‘truth’ in the criminal justice system. (shrink)

This study examines the influence of underwriter–auditor relationship on pre-initial public offering earnings management. Using a sample of Chinese to-be-listed firms, we find that a close UAR, as reflected in repeated collaborations between an underwriter and an audit firm in IPOs, is positively associated with pre-IPO earnings management. This association is more pronounced for firms with politically connected auditors/underwriters, firms with less reputable auditors/underwriters, firms located in provinces with weak legal environment, firms to-be-listed on boards with lax listing requirements, and (...) firms whose auditors are with low industry specialization, and legal liability exposures. We provide further evidence that UAR is associated with greater likelihood of irregular activities in post-IPO period and poorer post-IPO financial performance. To the extent that we control for alternative explanations and potential endogeneity, our results suggest that the collusion incentive is likely to drive repeated collaborations between underwriters and auditors in the Chinese IPO market. Our findings provide interesting implications for auditors, investors, and regulators seeking to understand the Chinese IPO market. (shrink)

Previous studies argue that religious firms are more ethical and thus engage less in accrual earnings management. At odds with the ethical view, we use a sample of Chinese listed firms and show that firms in religious regions use more real earnings management. We postulate that besides ethics, religion also proxies for risk aversion, which motivates firms to substitute accrual earnings management with real earnings management. Consistent with this view, we show that the positive association between religiosity and real earnings (...) management is more pronounced for firms with lower litigation risk and for firms with less reputable auditors. In addition, we use a mediation model introduced by Baron and Kenny :1173–1182, 1986) to show that religiosity affects earnings management through the channel of risk aversion. We conclude that firms choose real earnings management over accrual-based earnings management because of risk aversion, rather than ethical reasons. (shrink)

Previous studies argue that religious firms are more ethical and thus engage less in accrual earnings management. At odds with the ethical view, we use a sample of Chinese listed firms and show that firms in religious regions use more real earnings management. We postulate that besides ethics, religion also proxies for risk aversion, which motivates firms to substitute accrual earnings management with real earnings management. Consistent with this view, we show that the positive association between religiosity and real earnings (...) management is more pronounced for firms with lower litigation risk and for firms with less reputable auditors. In addition, we use a mediation model introduced by Baron and Kenny :1173–1182, 1986) to show that religiosity affects earnings management through the channel of risk aversion. We conclude that firms choose real earnings management over accrual-based earnings management because of risk aversion, rather than ethical reasons. (shrink)

Considerable interest exists regarding the media’s influence on corporate reactions, but the link between media visibility and corporate philanthropic response is not clear. Natural disasters thus provide an environment that makes visible the general processes relevant to that link. Based on agenda-setting theory, stakeholder theory, and impression-management theory, we propose that corporations that are highly visible in the news media are more likely to engage in CPR and donate more money. We also propose that companies with reputations for irresponsibility or (...) vulnerability strengthen that tendency. Data from Chinese firms after the Wenchuan earthquake on May 12, 2008, and the corresponding empirical results support our hypotheses. This study also shows that CPR is an active conduit for deflecting undesired reputations. (shrink)

Companies are expected to monitor sustainable behaviour to help improve performance, enhance reputation and increase chances of survival. This paper examines the relationship between sustainability committees and independent external assurance on the inclusion of sustainability-related targets in CEO compensation contracts. Using a sample of UK FTSE350 companies for 2011–2015 and controlling for governance and firm characteristics, we find both board-level sustainability committees and sustainability reporting assurance have a positive and significant association with the inclusion of sustainability terms in compensation (...) contracts. However, there is no joint impact between the voluntary use of independent external assurance and the role of sustainability committees on CEO compensation contracts. Sustainability-related terms in compensation contracts are more likely to be included, and higher compensation is likely to be paid, when assurance is provided by a Big4 firm and when a company operates in a sustainability-sensitive industry. Our findings highlight the potential of assured sustainability reports in assessing CEO performance in sustainability-related tasks, especially when sustainability metrics are included in CEO compensation contracts. Overall, our results suggest companies that invest in voluntary assurance are more likely to monitor management’s behaviour and be concerned about the achievement of sustainability goals. (shrink)