Reputation Signals Research Articles

Measuring Reputational Signals Regarding Public Sector Professions: Validation of a Scale and a Research Agenda

Public administration scholars are devoting increasing attention to the concept of reputation. The emphasis reflects a long-standing concern in the field with the sources of power and influence on administrative processes. This study extends the investigation of reputation from organizational reputation to reputational signals regarding public sector professions. We begin with a definition of reputational signals. We then develop a survey instrument that measures reputational signals from two signalers: elected officials and people close to respondents. Results are presented for internal consistency, exploratory and confirmatory factor analyses, convergent and discriminant validity, and average variance extracted. Next, we conduct a path analysis to test the effects of reputational signals regarding public school teachers on two outcomes using two staggered survey instruments with 588 US adults. We find that reputational signals from both types of signalers are positively and significantly associated with the perceived prestige of the teaching profession. Furthermore, reputational signals from people close to respondents are directly and positively associated with support for teacher autonomy. In contrast, reputational signals from elected officials do not have a statistically significant association with support for teacher autonomy. We conclude by discussing avenues for future research.

Теоретико-методологічне підґрунтя феномену економіки вражень

The article examines the origin of the theory of the economy of impressions, identifies related economic theories, which are its preliminary basis for development. It is determined that foreign scientists pay more attention to the research and development of the economy of impressions, while domestic scientists have recently begun to disseminate the provisions of the economy of impressions, believing that they are intended to form an attitude towards an economic entity that produces wares and provides services. Such an attitude, according to most researchers, can be considered as an innovative instrument for competition between manufacturers. Therefore, the aim of the article is to present the results of the theoretical and methodological provisions of the economy of impressions as a certain sufficiently progressive new phenomenon (emergence, process, model) in the field of economic relations. The article provides a logical sequence and interconnection of the theoretical and methodological basis for the formation of the essence and content of the concept of the economy of impressions, which allowed to conclude that it is a complex phenomenon that develops not only on the basis of economic achievements, but also on the basis of managerial, marketing, social, psychological aspects, which should be taken into account in the process of its use and development. It is defined that the impressions of consumers and partners are formed on the basis of trust in certain economic entities, on reputational signals (reputation of the seller’s / manufacturer’s platform) and trusting beliefs, which together significantly increase the cost of products and services and contribute to the development of a certain industry of impressions. The main conclusions of the article are that the development of the economy and evolutionary changes in the models of consumer behavior contributed to the gradual development of the economy of impressions and the strengthening of its influence on improving the efficiency of enterprises. It is noted that the essence of the concept of «economy of impressions» should reflect a complex system of mutual influence of technical-technological, financial-economic, social, psychological, ethical relations between producers and consumers of goods and services at the post-industrial stage of social development. Due to the unification of various industries of impressions, a synergistic effect arises, which contributes to the formation of various types of pleasures, sensations, emotions, the accumulation of individual consumer experience, for which consumers are willing to pay an increased price. The object of research of the economy of impressions is structured, which consists of the processes of improvement: doing business in the context of a new paradigm, innovative development of an industry of impressions, personal experience of consumers and partners, formation and dissemination in society of a complex information and social memory based on attractiveness, brands and reputation of economic entities.

The Host Canceled My Reservation! Impact of Host Cancelations on Occupancy Rate in the P2P Context: A Signaling Theory Perspective

The business of hosts in peer-to-peer (P2P) accommodation sharing has become an important source of revenue for individuals in many economies. However, there is a dearth of studies on hosts, specifically on the factors that affect host performance (i.e., occupancy rates). Drawing on the signaling theory and the source credibility theory and using a dataset of 41 610 reviews of 7004 Airbnb listings, we investigated the impact of cancelation rate—that conspicuously signals how many times a host has canceled a pre-existing reservation—on the host occupancy rate. Furthermore, we investigate the role of source credibility signals in reducing the impact of host cancelations. The results show that host signals of reputation, responsiveness, and expertise minimize the negative effect of cancelations on the occupancy rate. Theoretically, we advance the academic literature on credibility signals in P2P platforms and their moderating role on host performance. Managerially, the study helps P2P hosts in understanding the role of signals on occupancy rate.

Effect of Underwriter’s Reputation on Performance of small business IPOs

The purpose of the study is to determine the impact of the underwriter’s reputation on shaping the short- and long-term IPO success of small businesses. The paper uses IPO data from 2012 to 2020, three reputable proxy and event-time methodologies to analyze the company’s performance through market-adjusted excess returns, cumulative abnormal returns and buy & hold returns. Similarly, to mitigate common predispositions, use the calendar-time methodology, Fama-French three-factor model and Carhart four-factor model with high and low reputational groups. The study revealed a significant positive impact of underwriters’ reputations on first-day returns and long-term performance. Overall, the results indicate that, in the longterm, IPOs of Indian small and medium-sized enterprises are over efficient with regard to reputation signals. On the contrary, the calendar-time method and multifactor model indicate the low long-term IPO effectiveness of the SME. According to the authors’ conclusion, this is the first study to assess the impact of underwriter reputation on business performance using several reputation indicators, the calendar time methodology, and the multi-factor model on the ICP’s Indian IPO platform.

Challenging the nexus of power: The gaming dilemma of collaboration between government and enterprises in environmental management

This study presents a novel approach to analysing environmental governance by Chinese governments through the lens of a tripartite evolutionary game model. The key novelty of our research lies in the explicit incorporation of a reputation mechanism into the evolutionary game analysis, which significantly influences government decision-making, environmental governance strategies, and the dynamics of the relationship between government and polluting enterprises. By assessing the marginal effects of conventional governance and mobilization-based governance on the environmental mechanism, as well as the collusion behaviours between government and polluting enterprises, our study sheds light on previously unexplored aspects of environmental governance. Our findings indicate that the reputation mechanism plays a crucial role within the evolutionary game system of environmental governance, exerting a substantial impact on government decision-making. Furthermore, we demonstrate that policy interventions, such as increasing the cost of penalties under regulatory policies, can encourage compliance strategies among enterprises. Additionally, our research highlights the high sensitivity of reputation signals towards local government's environmental governance strategies, directly impacting their credibility and influencing the adoption of proactive environmental governance strategies. Moreover, we emphasize the role of the central environmental inspection system as a means to facilitate the transmission of environmental governance pressures between central and local governments, ultimately fostering a green development concept and promoting coordinated development between the economy and ecological civilization. Overall, this study provides valuable insights into the intricacies of environmental governance in China and underscores the importance of reputation mechanisms and policy interventions in promoting sustainable development.

Signaling sustainability: Can it entice business angels' willingness to invest?

AbstractDespite increasing attention to sustainability as a source of new business opportunities, current research on new ventures has hardly considered this factor with respect to access to funding. This paper examines the role of new venture sustainability signals on business angels' willingness to invest. Specifically, it considers the effects of third‐party sustainability certification and the self‐proclaimed label of sustainable entrepreneurship as congruent reputational signals for inducing angel investors' willingness to invest. Three studies were conducted using a 2 × 2 between‐subject experimental design on certification and label conditions, respectively, in two samples from the Amazon MTurk crowdsourcing marketplace and one from business angels. Results show that early‐stage ventures would use such signals in their sustainability exemplification strategy to convey quality and prestige and eventually improve their chances of raising business angel funding. Implications for theory and practice are discussed.

Bond Issuance as Reputational Signal: Debunking the Negative Perception of Additional Liability

This paper examines the determinants of bond issuance in the Chinese market and the influence of capital structure—in particular direct debt finance—on firm performance and the cost of debt. The results reveal that institutional factors in the Chinese market, in particular the involvement of the financial authority permission process during bond issuance, enhance the credibility of firms that are able to successfully issue bonds. Empirical analysis of Chinese listed manufacturing firms over the period from 2010 to 2021 demonstrates that firms with higher outstanding levels of bonds perform better and face lower costs of both bond and nonbond direct finance. We interpret this as bond issuance approval serving as a signal to markets of an implicit government guarantee on firms that are approved to issue bonds. The agency problem is analyzed using propensity-score matching and Logit analysis, revealing a trade-off between the principal–agent conflict and conflicts of interest among different shareholders when power is very concentrated through CEO duality: the CEO simultaneously serves as the chairman of the board. In large firms, as measured by total assets, the cost-reducing effect of the principal–agent problem being mitigated by CEO duality outweighs the agency costs arising from conflicts of interest between large and small shareholders, leading to an increased likelihood of successful bond issuance. However, in large firms, as measured by market capitalization, where share ownership is likely more diversified, this effect diminishes. In conclusion, this paper posits that policymakers ought to investigate strategies for granting preferential treatment to high-growth, small to mid-sized enterprises, enabling them to secure funding through direct debt financing.

A multimodal analytics framework for product sales prediction with the reputation of anchors in live streaming e-commerce

Insufficient sales prediction easily leads to the untimely dispatch of supply and causes inventory problems, resulting in a loss of profits for merchants. Previous sales prediction research was mainly based on traditional e-commerce platforms that cannot be directly applied to live streaming e-commerce, which adds many important elements. The main contribution of our research is the design of a multimodal analytics framework for product sales prediction in live streaming e-commerce. In the proposed framework, we explore the influence of anchor reputation on product sales and innovatively consider both historical and real-time reputation signals. In addition, to better extract valuable information for real-time signals, we propose an A-tiFSR model to extract features from product text and images and design a fine-grained analysis method to mine danmaku data. We conduct our experiments based on a real-world dataset collected from Douyin live streaming. The experimental results demonstrate the effectiveness of the constructed multimodal reputation signals of anchors on product sales prediction. The management implication of our research is that merchants and anchors should pay more attention to their multidimensional reputation. The proposed sales prediction framework can help merchants predict sales more accurately and optimize inventory policy and marketing strategies. This study thus supports the more effective development of live streaming e-commerce markets.

Reputation Signals and the Evaluation of Middle- and Low-Status Organizations

Reputation Signals and the Evaluation of Middle- and Low-Status Organizations

${N}$-Player Trust Game With Second-Order Reputation Evaluation in the Networked Population

Trust has played a significant role in the maintenance of social links, which has attracted a great deal of concern from a diverse range of fields including economics, finance, and social science. In this article, we investigate the effect of second-order reputation evaluation on trust game dilemma and explore how individuals establish an indirect reciprocal relationship by adjusting their reputation. First, a novel <inline-formula xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink"><tex-math notation="LaTeX">${N}$</tex-math></inline-formula> -player trust game is proposed by combining the payoff-driven and reputation-driven update processes. Second, four classical “second-order” norms are introduced to evaluate individual reputation, which will be judged by both their own strategies and the reputation status of their counterparts. Finally, through extensive simulations on different network topologies, we find that untrustworthy trustees would change their strategies with the help of a reputation signal. Meanwhile, the structured population presents a nonmonotonic cooperation trend with the increase of reputation strength in the mixed imitation process. Besides, there is an optimal interval that can promote the continuous emergence of trust between investors and trustworthy trustees. The current results are of high importance to understand the emergence of mutually beneficial symbiosis of biological groups inside an unknown environment.

Naming as business strategy: an analysis of eponymy and debt contracting

This study proposes that naming a firm eponymously is a mechanism that small private firms can use to signal their superior financial performance and commitment to fulfill debt contract obligations. Using 621,614 small private firms in Europe over the period 2008–2018, we find that small private eponymous firms pay significantly lower interest on their debts and have more long-term debt than non-eponymous firms. Our findings are robust to various controls and placebo tests. Additional analyses show that eponymy lowers the cost of debt and facilitates long-term debt via reputation signaling and private information. We also document that the effect of eponymy on debt contracting is most pronounced when there is less financial development and when firms’ dependence on external financing is low, consistent with the idea that high-quality firms opt for eponymy when they consider less external financing.

Third-party signals in crowdfunded microfinance: which microfinance institutions boost crowdfunding among refugee entrepreneurs?

Despite the relevance of crowdfunding as a financing tool for underrepresented entrepreneurs, prior research pays scant attention to the funding gap for refugee entrepreneurs. Using a composite framework that integrates both entrepreneurship research and signalling theory, the current study investigates how microfinance institutions (MFIs) and refugee entrepreneurs can deploy signals to pursue entrepreneurial opportunities on digital platforms. The results, based on refugee data pertaining to 5615 loans on Kiva during 2015–2018, reveal that when refugee loan campaigns are affiliated with an MFI that itself features lower default rates, achieves high profitability, adopts an entrepreneurial support orientation, operates transnationally and is digitally focused, the campaign achieves better crowdfunding performance outcomes than refugees campaigns affiliated with an MFI that lacks these features. These findings provide clear evidence that when MFIs offer reputational signals, visible to the crowd of lenders, it can increase entrepreneurial financing and democratize resource acquisition among financially excluded refugee entrepreneurs.Plain English SummaryCan microfinance institutions boost crowdfunding among refugee entrepreneurs and their small businesses? Yes, they can. Third-party signals may support growth in alternative finance for #refugees. While research on entrepreneurship has largely targeted immigrant entrepreneurs, the refugee context has been neglected, namely how refugee entrepreneurs fund their economic activities. With signalling literature on new venture financing of entrepreneurship being greatly fragmented, we contribute to the understanding of how crowdfunding microfinance boost venture financing of refugees. We study the gain of legitimacy by refugee entrepreneurs displayed through reputational signals intertwined with the reputation of microfinance institutions (MFI). Our results reveal higher success in funding outcomes when the loan campaign is linked with microfinance institutions with lower loan default rates, higher profitability, driven by entrepreneurial support, operating internationally and with a digital presence, compared with MFI that lacks these features. Our work has relevant implications for underrepresented refugee entrepreneurs, crowdfunding actors, policymakers and scholars. Our findings indicate that the affiliation between refugees-microfinance institutions creates certain reputational signals which enhance entrepreneurial finance and shape conditions for societal integration in the host country. For crowdfunding platforms, we show that to develop an effective, self-perpetuating entrepreneurial ecosystem, they should work to build their reputation among lenders, by capitalizing on and making third-party signals more readily available. At the same time, they must conduct due diligence to assess and monitor MFIs’ behaviour. Policy makers are recommended to build up on this digital microfinance experience to enhance new venturing finance refugee programs. We, thus, extend prior findings about the importance of third-party affiliations by establishing a composite framework of third-party signals in the context of new venture financing for financially excluded communities, and refugees in particular. Accordingly, for scholars, we offer cross-disciplinary insights into which characteristics of intermediaries can facilitate links between the supply (crowd of lenders) and demand (refugee entrepreneurs) sides in prosocial crowdfunding.

Environmental reputation and bank liquidity: Evidence from climate transition

AbstractThis study empirically investigates how a bank's nonfinancial signals of environmental reputation affect its deposits and credit provision in US counties with severe climate transition risks. We find that banks with higher reputational risks associated with environmental issues tend to experience declining deposits in counties exposed to severe climate change risks. Banks with a poor environmental reputation also reduce mortgage origination in such counties and diminish liquidity creation if they have high deposit shares in counties sensitive to climate transition. This study suggests that a bank's reputation regarding environmental, social and governance practices is an important underlying cause of bank liquidity in areas sensitive to climate change.

Mediating Role of Parasocial Relationships on Social Media Influencers' Reputation Signals and Purchase Intention of Beauty Products

Social media influencer has become an important component of marketing communication. Hence, this research aims to determine the facets of social media influencers’ reputation signals (communication skills, influence, perceived authenticity, and perceived expertise) that contribute to the customers’ purchase intention of X beauty products, mediates by the parasocial relationship. The study applied the Stimulus-Organism-Response (S-O-R) model and used a survey design. The results showed that the communication skills and expertise of the social media influencers have a significant relationship with parasocial relationships, and the parasocial relationship has a significant relationship with purchase intention. In addition, the parasocial relationship was found to mediate the relationship between the expertise of social media influencers and purchase intention. The study provides valuable insights to public relations and marketing practitioners of the beauty industry to be used in building a successful social media marketing strategy.

Beyond virtue signaling: Perceived motivations for pronoun sharing

AbstractSharing one's pronouns when introducing oneself is an emerging practice intended to prevent assumptions of what pronouns to use when referring to others. This practice may make people comfortable sharing their pronouns so that they are not misgendered and may signal inclusiveness to transgender and nonbinary (TGNB) people. How do people in the United States perceive the motivations behind pronoun sharing? Three preregistered experiments (N = 2641), in addition to three pilot studies (N = 8219; results presented in Supporting Information), conducted in the United States reveal that people perceive at least three underlying motivations for pronoun sharing when they learn that someone shared their pronouns in a workplace introduction: reputation signaling (trying to enhance one's own reputation), identity signaling (straightforwardly indicating one's identity and how one would like to be addressed), and norm support (sincerely endorsing pronoun sharing as a norm). We also show that the sharer's TGNB identity influences the motivations that observers infer. In general, we find that perceptions of straightforward identity signaling and collective benefit‐oriented norm support are higher, and perceptions of self‐oriented reputation signaling are lower, when the sharer is transgender rather than cisgender. This study provides a novel characterization of social perceptions of transinclusive behavior.

My Company Cares About My Success: The Impact of a Firm’s Ethical Reputation on Employee Success

As corporate scandals continue to dominant the news cycle, the value of a company’s ethical reputation has become a focal point for management researchers. We seek to join this conversation and extend the research centered on a firm’s ethical reputation. We accomplish this by shifting our focus away from its impact on external stakeholders (e.g., customers, investors, potential job applicants) to its impact on internal stakeholders (e.g., employees). To this end, we rely on signaling theory to explain why a firm’s ethical reputation matters to its employees in effort to bridge the macro-micro research gap. Specifically, we integrate one macro-level proprietary dataset (i.e., Ethisphere) and one micro-level proprietary dataset (i.e., Glassdoor) to propose and demonstrate that a firm’s ethical reputation (i.e., macro-level construct) positively impacts multiple aspects of employee career success, such as career opportunities and work-life balance (i.e., micro-level constructs). Given our signaling theory framework, we also identify and explain when two industry-level characteristics operate as boundary conditions that distort a firm’s ethical reputation signaling properties. Subsequently, we also demonstrate that high levels of industry competition and industry regulation mitigate the impact of a firm’s ethical reputation on career opportunities and work-life balance. Theoretical and practical implications are discussed.

Investor Reactions to Corporate Misconduct: The Moderating Role of Firm Reputation

Corporate misconduct research has observed negative market reactions following misconduct. Drawing on signaling theory, this study considers misconduct as a negative signal and links misconduct severity to market reactions. We argue that severity level decides signal strength and increases market reaction magnitude. However, it is unclear why different firms are punished to varying degrees for similar misconduct. We therefore demonstrate how perceptual biases distort investors’ perceived severity and describe how the effect of severity is moderated by firm reputational signals, including moral, technical, and leadership capital. This study is supported by an empirical analysis of 344 Chinese listed firms that engaged in financial misconduct during 2009–2019. Accordingly, we facilitate a more fine-grained understanding of the relationship between corporate misconduct and market reactions.

Not very competent but connected: Leaders' use of employee social networks as prisms to make delegation decisions.

Delegation is a critical tool for busy managers. Early delegation research suggests that managers are reluctant to delegate beyond a few highly competent employees or those with whom they have a strong relationship. Extending this line of research, we integrate signaling theory with a view of social networks as "prisms," to demonstrate the relevance of employees' network ties in the work unit for delegation. Signaling theory argues that when direct data about employee competence are mixed or ambiguous, decision makers will look for more indirect signals with which to make inferences about quality and reputation. One such signal is suggested by the networks as "prisms" perspective, which argues that network ties can operate as reputational signals in the absence of more direct quality data. Combining these insights and data from a field study and two follow-up laboratory studies, we find that in situations of moderate employee competence, managers will draw positive reputational inferences and be more willing to delegate to employees when such employees are more central in the friendship network of the work unit as well as when they share common memberships in friendship cliques with the managers. These network ties, however, do not matter for delegation decisions when there are direct data to indicate that employees are highly competent or clearly poor performers. Our lab studies elucidate the mediating role of perceived reputation. Implications for theory and practice are discussed. (PsycInfo Database Record (c) 2022 APA, all rights reserved).

Is it costly to deceive? People are adept at detecting gossipers' lies but may not reward honesty

The possibility that gossipers may share dishonest reputational information is a key challenge to claims that gossip can shore up cooperation in social groups. It has been suggested that imposing social costs on dishonest gossipers should increase the honesty of these reputational signals. However, at present, there is little evidence of people's willingness to impose costs on dishonest gossipers; there is also little evidence of their ability to detect gossipers' lies in the first place. This paper aims to shed light on people's abilities to detect dishonest gossip and their treatment of those who share it. To do this, we report the results of two trust game studies using the strategy method (study 1) and repeated interactions in the laboratory (study 2). We show that in an environment where gossipers tell spontaneous lies people are more inclined to believe honest than dishonest gossip. We also show that people are more likely to treat favourably gossipers they believe to be honest, but that this does not always result in more favourable treatment for gossipers who were actually honest. We discuss the implications for the potential utility of social sanctions as a tool for securing honesty. This article is part of the theme issue 'The language of cooperation: reputation and honest signalling'.

Do reputational signals matter for nonprofit organizations? An experimental study

PurposeThis paper aims to untangle the underlying mechanisms through which reputational signals promote stakeholders' intentions to donate in nonprofit organizations via stakeholder trust.Design/methodology/approachThe authors apply a moderated mediation model using an experimental design with N = 248 business and public management students of France.FindingsThe results indicate that both a formal reputational signal (third-party certificate) and an informal reputational signal (self-proclaiming to be social entrepreneurial) affect stakeholder trust and intentions to donate. Stakeholder trust partially mediated the relationship between the formal signal and intentions to donate, and the mediation effect was stronger when an informal signal was present (vs. not present).Practical implicationsTrust is central to the exchange of nonprofit organizations and their external stakeholders. To enhance trust and supportive behavior toward nonprofit organizations, these organizations may consider using formal and informal reputational signaling within their marketing strategies.Originality/valueThis research highlights the pivotal role of formal and informal reputational signals for the enhancing stakeholders' trust and donation behavior in a nonprofit context.