The value of reputation capital during the COVID-19 crisis: Evidence from Japan

Tomonori Manabe and Kei Nakagawa

Finance Research Letters, 2022, vol. 46, issue PA

Abstract: This study investigates the value of reputation capital with regard to the stock market crash in the early stages of the COVID-19 pandemic. At that time, when stock prices fell precipitously, firms with a positive reputation for the usefulness of products/services seen from within their business network showed stock returns five to seven percentage points higher than firms with a low reputation score. This suggests a positive reputation among stakeholders can serve as insurance against shocks in times of crisis. Notably, results suggest firms that can build public trust owing to the usefulness of the product/service are more resilient from crash caused by real economic damage, as occurred with the COVID-19-related crash.

Keywords: Crash risk; Corporate reputation; COVID-19; Reputation capital; Stakeholder (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:46:y:2022:i:pa:s154461232100372x

DOI: 10.1016/j.frl.2021.102370

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