Corporate Reputation and Financial Performance of Firms in Turkey

Serpil Tomak

Corporate Reputation and Financial Performance of Firms in Turkey

Year 2014, Volume: 7 Issue: 1, 289 - 303, 01.04.2014

Abstract

Identifying the relationship between corporate reputation and business performance is important for an economy. As corporate reputation becomes critical, then firms have to give more emphasis on sound risk management practices and corporate credibility. Most research suggest that good or strong corporate reputation have a positive impact on firm financial performance in developed markets. However, empirical surveys in an emerging economy context by using different financial measures produce controversial results. This study analyzes the financial performance of reputable Turkish firms comparatively by nonreputable firms registered in Turkish Stock Exchange Market (BIST 30) over the period 2008 to 2012. The results indicate that there isn’t enough evidence for firms with high reputation exhibit greater performance than nonreputable firms. The question of whether good corporate reputation increases firm performance in emerging markets like Turkey is not clear enough.

Keywords

Corporate Reputation, Reputational Risk, Corporate Valuation Model JEL Classifications: G32; G34

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