How a Good Name Influences Performance on the Stock Market
Numerous scientific studies have found a positive correlation between a good corporate reputation and such business objectives as customer or employee loyalty. But how does a solid reputation affect a company’s financial performance on the stock market? A team lead by Professor Schwaiger at the Institute of Market-based Management (IMM) at the Ludwig-Maximilians-University Munich presents its latest research results.
The comprehensive study by the IMM compared the reputation and stock-market performance of 60 blue-chip companies. The findings: the 25 percent of companies with the best reputation (Top25) considerably outperformed the companies with a poorer reputation. And compared to price movements on the DAX 30 in general, the Top25 return greater yield with lower risk.
Competition for “High Potentials”
The effect of a good reputation on the recruiting market is equally clear: companies with a good reputation are much more sought-after than comparable companies with a poorer reputation. In the contest for 'high potentials', this means that companies with lesser reputations need to pay salaries of up to 19 percent higher in order to win over graduates.
New Methods
The methods for measuring reputation used in the study are based on a custom-designed model. Reputation indices and reputation drivers are measured here much more precisely than in previous designs. For example, in this model, the emotional component also plays a central role in evaluating a company.
Who Wants to Be a Millionaire? more
Top Story: Reputation Revised
|
