Quantifying the Importance of Firms by Means of Reputation and Network Control.

Yan Zhang,Frank Schweitzer

doi:10.3389/fdata.2021.652913

Abstract

As recently argued in the literature, the reputation of firms can be channeled through their ownership structure. We use this relation to model reputation spillovers between transnational companies and their participated companies in an ownership network core of 1,318 firms. We then apply concepts of network controllability to identify minimum sets of driver nodes (MDSs) of 314 firms in this network. The importance of these driver nodes is classified according to their control contribution, their operating revenue, and their reputation. The latter two are also taken as proxies for the access costs when utilizing firms as driver nodes. Using an enrichment analysis, we find that firms with high reputation maintain the controllability of the network but rarely become top drivers, whereas firms with medium reputation most likely become top driver nodes. We further show that MDSs with lower access costs can be used to control the reputation dynamics in the whole network.

Highlights

Reputation is a precious value for social and economic actors, such as, individuals, organizations, or firms
Once we have identified the set of driver nodes, as described we have to consider a control signal, that is, an induced change that modifies the reputation of only the driver nodes
We find that from the 1,318 firms in the ownership network, we need to control a minimum number of Nd 341 firms directly in order to control the whole network

Summary

Introduction

Reputation is a precious value for social and economic actors, such as, individuals, organizations, or firms. Building up reputation may take a long time, but it can be destroyed very quickly. This asymmetry between growth and decay needs to be taken into account when we wish to model reputation dynamics (Zhang and Schweitzer, 2019; Schweitzer et al, 2020). A corporate reputation is evaluated via surveys This often results in reputation rankings (Fombrun et al, 2015), that is, a comparison of relative, rather than absolute, reputation. This approach makes it quite difficult to compare the reputation of firms at a large scale, for instance, across different industrial sectors. Classical reputation rankings do not allow addressing the important problem of reputation spillover, that is, the increase/decrease of a firm’s reputation based on the increase/decrease of the reputation of other firms it depends on

Methods

Results

Conclusion