Reputation Spillover Research Articles

Reputation matters: Spillover effects for developing countries in the enforcement of US food safety measures

We use data on US food import refusals to show for the first time that reputational spillovers are important factors in the enforcement of food safety measures. The odds of a country experiencing at least one import refusal increase by over 100% if there was a refusal of the same product from a neighboring country in the preceding year. Similarly, the odds of a refusal increase by 62% if there was a refusal of a related product from the same country in the preceding year. These findings have important policy implications for exporters of agricultural products, particularly in middle-income developing countries.

Theorizing Reputational Spillovers

Academy of Management Annual Meeting Proceedings includes abstracts of all papers and symposia presented at the annual conference, plus 6-page abridged versions of the “Best Papers” accepted for inclusion in the program (approximately 10%). Papers published in the Proceedings are abridged because presenting papers at their full length could preclude subsequent journal publication. Please contact the author(s) directly for the full papers. Theorizing Reputational SpilloversShoeb Mohammad and Andrew CraneShoeb MohammadYork U. and Andrew CraneYork U.Published Online:30 Nov 2017https://doi.org/10.5465/ambpp.2015.15219abstractAboutSections ToolsDownload CitationsAdd to favoritesTrack Citations ShareShare onFacebookTwitterLinkedInRedditEmail AbstractReputational effects on firms whose actions have social consequences are known to affect the reputation of other firms, but the theoretical understanding of this "reputational spillover" has thus far been limited. This paper furthers theoretical development of the phenomenon by uncovering and examining its facets that have received little or no consideration – the severity of spillover across firms and the full scope of the spillover boundary, in which a spillover can reach firms both within and across industries. A theoretical framework that explains the process of reputational spillover is developed, comprised of the focality of the event that affects the origin firm from which the spillover emanates and the perceived relatedness of target firms that receive spillover effects. The framework also includes the effect of environmental factors and institutional intermediaries on the spillover process. FiguresReferencesRelatedDetails Vol. 2015, No. 1 Permissions Metrics in the past 12 months History Published online 30 November 2017 Published in print 1 January 2015 InformationCopyright of Academy of Management Journal is the property of Academy of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.KeywordsCorporate reputationself-regulationsocial issues

Theorizing Reputational Spillovers

Reputational effects on firms whose actions have social consequences are known to affect the reputation of other firms, but the theoretical understanding of this “reputational spillover” has thus far been limited. This paper furthers theoretical development of the phenomenon by uncovering and examining its facets that have received little or no consideration – the severity of spillover across firms and the full scope of the spillover boundary, in which a spillover can reach firms both within and across industries. A theoretical framework that explains the process of reputational spillover is developed, comprised of the focality of the event that affects the origin firm from which the spillover emanates and the perceived relatedness of target firms that receive spillover effects. The framework also includes the effect of environmental factors and institutional intermediaries on the spillover process.

Branding, Quality, and 'Price Ownership' through RPM

Manufacturers constantly make decisions that crucially affect product quality, e.g., through procuring high-quality inputs or maintaining high hygienic standards in production. We show fi rst how a high price for its product increases a manufacturer’s incentives, so that there is a positive relationship between quality and price. We then point out a confl‡ict of interest between retailers and the manufacturer in the choice of the final price. Retailers do not internalize the reputation spill-over that higher prices have on demand at all outlets and they have, in addition, less incentives to support brand image through higher prices as this erodes their own outside option while increasing that of the manufacturer. "Price ownership" by the manufacturer, as supported by RPM, can then lead to higher quality, higher overall efficiency, and possibly also higher consumer surplus even when prices are higher.

Knowledge and Reputation Spillovers: Strategic Alliances and Firm Environmental Performance

In this study, we explore knowledge and reputation spillovers from a firm's strategic alliance partners. We argue that receiving both benefits from the same partner creates a strategic trade-off fo...

Reputation Spillover from Foreign to Home Countries and Its Impact on Domestic Market Performance

Reputation has attracted much scholarly attention in economics, sociology, and management over the last two decades. Despite this attention, however, most studies on reputation have dealt with a single audience context and the fundamental process by which reputation is developed and interpreted by audiences has been overlooked. This study focuses on the role of the audience as an important building block of reputation and considers multiple sets of audience in different contexts to investigate the audience effect in delivering and interpreting reputation. Especially, we consider reverse reputation spillover from a foreign to a home country, which has been largely ignored in research on international business. We argue that product reputation established in a foreign country, or outside reputation, will influence the decision-making of audiences in a home country, even after controlling for product reputation in the home country. Good outside reputation implicates recognition from the out-group member, which adds to the information set available to the focal audience and generates a halo effect for the product. In addition, we suggest that the impact of outside reputation will vary depending on the degree to which the characteristics of the audience in the foreign market are similar to those of the home market. Hypotheses are tested using the sample of the international automotive industry from 2005 to 2010 and results from the analysis support the arguments.

Why firms make unilateral investments specific to other firms: the case of OEM suppliers

AbstractThis study examines why and under what conditions firms will make unilateral relationship‐specific investments to their transaction partners. We propose that firms are more likely to make such investments when the investment yields positive economic spillover values for other transactions with the same exchange partners as well as for third‐party transactions. We also model two types of positive inter‐project spillover effects that a transaction may generate: knowledge spillovers and reputation spillovers. We find empirical support for our developed theory in the context of Taiwanese suppliers of original equipment manufacturers. Copyright © 2008 John Wiley & Sons, Ltd.

Moving Beyond Firm Boundaries: A Social Network Perspective on Reputation Spillover

A change in an organization's reputation has consequences and implications that may go beyond that organization's boundaries. Drawing on social network and stakeholder research, we introduce the construct of reputation spillover to examine the process in which a reputational crisis occurred to one organization may spillover to other organizations that are either proximate or structurally equivalent to the focal organization. We argue that this process occurs mainly through the perceptions and reactions of stakeholders and is contingent upon the network centrality of the focal organization, the network structure of the industry and the past reputation of potential recipient organizations.

Longer-Term Consequences of Anger Expression in Negotiation: Retaliation or Spill Over?

Negotiators often concede to angry partners. But what happens when they meet again? The reputation spill-over hypothesis predicts that negotiators demand less from a partner who had expressed anger during a previous negotiation, because they perceive the other as tough. The retaliation hypothesis posits that negotiators demand more from a partner who had previously expressed anger, because they develop a negative impression of the other and want to set things straight. In Experiment 1, participants first negotiated with a simulated partner who expressed anger during a computer-mediated negotiation. Participants subsequently demanded less in a second negotiation when they dealt with the same rather than a different partner. In Experiment 2, participants demanded less in the second negotiation when their partner in the first negotiation had expressed anger rather than no emotion and the second negotiation was with the same (rather than a different) partner. Consistent with the spill-over hypothesis, this effect was mediated by inferences regarding the partner's limits.

The Effect of Auditor Reputation on Stock Returns - The Case of Arthur Andersen

We examine the consequences for the stock price movement of Andersen's German clients of several news events during the Enron crisis that were potentially damaging to the reputation of Enron's auditor Andersen. It seems to be likely that there may not only have been reputation-damaging effects of the selected events for the US arm of Andersen but also negative reputation spillovers to Andersen's worldwide organisation. Contrary to the results of several US-studies there is no indication of significant negative average abnormal returns around the announcement of the shredding of Enron-related documents by Andersen in January 2002. However, our empirical evidence suggests that the share prices of Andersen's German clients were on average negatively affected by the event in December 2001 when Andersen's CEO Berardino admitted an error in judgement concerning the Enron audit in the US-Congress. Our results further suggest that in Germany the other Top Tier auditors' reputation was negatively affected by the Andersen specific event in December 2001 as well, although to a lesser extent than Andersen's reputation. However, contrary to Andersen's reputation, it seems as if the other Top Tier auditors' reputation suffered an additional erosion around the announcement of the indictment against Andersen in March 2002.

Strategic trade policy in the presence of reputation spillovers

With the emergence of North–South intra-industry trade in products where consumers value quality, exporting countries potentially face significant barriers to entry. Due to the existence of asymmetric information about new products in a foreign market, the producer's reputation becomes an important factor in determining whether consumers choose to make a purchase. The purpose of this paper is to add learning externalities across multiple products to a model of endogenous firm entry and quality in order to examine the implications for commercial intervention. Building on the work of Mayer (1984) and Grossman and Horn (1988), we introduce learning across multiple products in the presence of incomplete information. If the reputation of the initial entrants from a country is poor, it raises the informational barriers to entry. Consequently, strategic trade policy depends on both the quality choice of firms entering the market for exports as well as the degree of product interrelatedness. In the presence of high and lowquality producers, across-the-board subsidization hinders rather than promotes exports in developing countries.

Reputational spillovers, innovation, licensing, and entry

Adoption of a new product by a multiproduct finn may affect all its sales by altering its reputation as an innovator If adopting a success has a ‘halo effect’ that enhances the adopter's reputation, then an inventor's licensing profit exceeds monopoly profit from the new product If adopting a failure has a ‘black-eye effect’ that damages the adopter's reputation, then an inventor's licensing profit is maximized by a fixed fee, not an auction When both effects are present, an inventor licenses new products that are likely to succeed, but enters with those that are likely to fail