The Economic Consequences Of Reputation

As a kind of signal and resources,reputation's influence has attracted the attention of academic community in recent years.But the impact of reputation has not yet reached a unanimous conclusion,and mostly discussed from the angel of reputation level.This paper argues that it is unreliable to verify the reputational incentives and constraints by comparing the relevant data of the companies operated by executives who are listed and not listed.And the results obtained by the comparison may not be because of reputation,but rather management ability,company strength and so on.Therefore,we need to find a new way to verify the role of reputation.In recent years,the major financial media continuously launched the list about executives' capabilities,which provide favorable conditions for us to study senior executives' reputation.For senior executives,the direct impact of"getting on the list" is the promotion of reputation.It proves senior executives'past performance and the individual ability.At the same time,it is good for the career development of senior executives.However,as a manager and the "image spokesperson" of a listed company,the promotion of reputation for senior executives do not only affect themselves,but also affect the development of the listed company.Therefore,this paper collated 8 lists about senior executive ability from 2000 to 2014,selected 176 listed company executives who had been on the list for the first time from 2004 to2014.And I ensure that the top executives worked at least two years for the listed company before and after the list.This paper uses the PSM statistics method and DID model to verify the economic consequences of reputation promotion.I studied the economic consequences of reputation in two segments:value distribution(company performance)and value creation(inefficient investment and innovation performance).Finally,the following three main conclusions are drawn:1.The reputation promotion has a positive impact on the performance of the company;2.The reputation promotion can effectively suppress the inefficiency investment;3.The reputation promotion on the list can effectively improve the innovation performance.