<abstract xmlns="http://www.w3.org/1999/xhtml"><bold>Background:</bold> In recent years, reputation has become an important risk concern for companies around the world. Deloitte Global Survey highlights the reputation risk as the top strategic business risk in 2014. This is also proven by a research conducted by AON Global Risk Management Survey in 2015 and Allianz Risk Barometer Survey in 2016 which finds a loss of reputation as one of the biggest risks for business executives. Furthermore, the importance of reputation is confirmed by the fact that reputation accounts for more than 25 percent of a company’s market value and the total market capitalization of the S&amp;P500 companies.<bold>Objectives:</bold> To investigates the relationship between corporate reputation and financial performance.<bold>Methods/Approach:</bold> The survey of the paper was conducted in 2015 in Croatia. The questionnaire for assessing corporate reputation contained three reputational dimensions: products and services, corporate integrity, and organizational performance while the financial dimensions contained indicators of EVA, ROCE, ROA, ROE and the financial stability coefficient. Hierarchical regression methods were applied in the analysis.<bold>Results:</bold> This research leads to the conclusion that some dimensions of corporate reputation can be important predictors of financial performance.<bold>Conclusions:</bold> Results of the research could be a valid motivation for business executives to consider reputation risk as a critical issue of corporate business strategy.</abstract>

Background: In recent years, reputation has become an important risk concern for companies around the world. Deloitte Global Survey highlights the reputation risk as the top strategic business risk in 2014. This is also proven by a research conducted by AON Global Risk Management Survey in 2015 and Allianz Risk Barometer Survey in 2016 which finds a loss of reputation as one of the biggest risks for business executives. Furthermore, the importance of reputation is confirmed by the fact that reputation accounts for more than 25 percent of a company’s market value and the total market capitalization of the S&P500 companies.Objectives: To investigates the relationship between corporate reputation and financial performance.Methods/Approach: The survey of the paper was conducted in 2015 in Croatia. The questionnaire for assessing corporate reputation contained three reputational dimensions: products and services, corporate integrity, and organizational performance while the financial dimensions contained indicators of EVA, ROCE, ROA, ROE and the financial stability coefficient. Hierarchical regression methods were applied in the analysis.Results: This research leads to the conclusion that some dimensions of corporate reputation can be important predictors of financial performance.Conclusions: Results of the research could be a valid motivation for business executives to consider reputation risk as a critical issue of corporate business strategy.

The Impact of Reputation on Corporate Financial Performance: Median Regression Approach

Business Systems Research Journal

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Background: In recent years, reputation has become an important risk concern for companies around the world. Deloitte Global Survey highlights the reputation...

The Impact of Reputation on Corporate Financial Performance: Median Regression Approach

Published Online: Oct 25, 2017

Page range: 40 - 58

Received: May 14, 2017

Accepted: Jul 28, 2017

DOI: https://doi.org/10.1515/bsrj-2017-0015

Keywords
business ethics, corporate reputation, financial performance, hierarchical regression, reputation risk

© 2017 Silvija Vig et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The Impact of Reputation on Corporate Financial Performance: Median Regression Approach

Published Online: Oct 25, 2017

Page range: 40 - 58

Received: May 14, 2017

Accepted: Jul 28, 2017

DOI: https://doi.org/10.1515/bsrj-2017-0015

Keywordsbusiness ethics, corporate reputation, financial performance, hierarchical regression, reputation risk

© 2017 Silvija Vig et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
business ethics, corporate reputation, financial performance, hierarchical regression, reputation risk