Corporate Reputation and Subsequent Financial Performance: A Theoretical Explanation of the Mediating Role of Trust

M. M. D. De S. Gunawardena, R. Senathiraja and S. Buvanendra

International Journal of Business and Management, 2021, vol. 14, issue 11, 209

Abstract: Amidst empirical evidence that claim corporate reputation affects subsequent financial performance of firms, the literature does not provide a comprehensive explanation for this relationship. The aim of this article therefore is to provide a theoretical explanation on how corporate reputation affects the subsequent financial performance. The available literature supports that corporate reputation signals trustworthiness of firms, based on which stakeholders make decisions such as to trust a firm and allocate valuable, scarce resources. The resources so allocated would help a firm to achieve its objectives, including targeted financial performance in subsequent years. In order to explain the role of trust in the relationship between corporate reputation and subsequent financial performance, the researchers combine two extensively referred models from the reputation and trust literature, the model of reputation-financial performance dynamics and the proposed model of organizational trust. The signaling theory and the stakeholder theory provide the theoretical explanation for the new model proposed.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ccsenet.org/journal/index.php/ijbm/article/download/0/0/41056/42423 (application/pdf)
http://www.ccsenet.org/journal/index.php/ijbm/article/view/0/41056 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijbmjn:v:14:y:2021:i:11:p:209

Access Statistics for this article

More articles in International Journal of Business and Management from Canadian Center of Science and Education Contact information at EDIRC.
Bibliographic data for series maintained by Canadian Center of Science and Education ().