The “industrial halo” and its impact on the assessment of corporate reputation

• Emilio Calvo-Iriarte ^[1] ; Marıa Victoria Esteban-Gonzalez ^[1] ; Arturo Rodrıguez-Castellanos ^[1]
  1. [1] Universidad del País Vasco/Euskal Herriko Unibertsitatea

     Universidad del País Vasco/Euskal Herriko Unibertsitatea

     Leioa, España

     
• Localización: European journal of management and business economics, ISSN-e 2444-8494, ISSN 2444-8451, Vol. 33, Nº. 2, 2024, págs. 237-252
• Idioma: inglés
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• Resumen

  • Purpose– The gap that this research attempts to fill is to analyse the explanatory factor “industry” when assessingthereputationofacorporategroup.Inotherwords,thisresearchattemptstodemonstratetheimpactof the “industrial halo” ontheassessmentofcorporatereputation, giventhat,todate,the academicliteraturehasnot considered industry as an explanatory variable in the assessment of the reputation of private companies. Design/methodology/approach– A sample of 43 Spanish companies was used to analyse the relationship between the reputation of firms as measured by the Merco Empresas index, and the industries to which they belong, after controlling for company performance, size, turnover, public recognition of their leadership, and corporate responsibility. This involved conducting a cross-sectional analysis of the relationship between the variables for each year in the time period from 2005 to 2016. The available data were taken from the firms’ annual financial reports and websites, as well as from the Merco. Findings– The paper shows the existence of industrial halos that account for the corporate reputation of businesses in Spain. It is also shown that industrial halos are not permanent over time, and that they tend to occur in years of crisis. Researchlimitations/implications–Itwouldhavebeendesirableforthisstudytohavehadsufficientdata to include other industries, but this was not possible. As for possible extensions, in addition to expanding the periodconsidered, otheranalyticaltechniques,suchaspaneldatamodels,couldbeappliedtoallowcomparison with the results obtained here. Practical and social implications– The results of this study have some practical implications. Firstly, firms that publish corporate reputation rankings should be aware of the distortion that the industrial halo can produce, especially in times of uncertainty, and seek to correct for it in their measurements. And secondly, corporate groups themselves should assume that the reputation of the industry affects their individual reputation, and consequently, they should see the other companies in the industry not only as competitors but also as “reputational allies”. They should therefore make collective efforts to improve in this respect, especially in the face of reputational crises. Originality/value–Thispaperprovidesabetterunderstandingoftherelationshipbetweenthereputation of a company and the industry to which it belongs, and of its permanence over time. This relationship has been little studied in the Spanish market to date.