Measurement, Validation and Factor Structure of Corporate Reputation in Banking Sector of India

Abstract

The purpose of the study is to measure and validate the corporate reputation scale (CR) and to examine its factor structure and nomological validity in banking sector in Indian context. The data were collected from 240 customers of three selected private banks and three public banks. Exploratory factor analysis (EFA), inter-item analysis and confirmatory factor analysis (CFA) were used for data purification and analysis. The result of the study reveals seven dimensions of corporate reputation using EFA. However, only two dimensions, that is, customer orientation (five items) and emotional appeal (four items) were established after the application of CFA. The model fit results reveal support for single factor structure, two factor structure independent and cross factor structure for CR. Lastly, nomological validity of the CR in relation to business performance was established in all the three different CR models. The study establishes corporate orientation and emotional appeal as two significant dimensions of corporate reputation, which can be considered in place of Walsh and Beatty’s seven dimension CR scale. The two dimension scale of corporate reputation needs to be validated in the future research to consider it as a short scale tool for CR measurement.