Do Credible Firms Perform Better in Emerging Markets? Evidence from China
Prior research suggests that corporate credibility is associated with firm financial performance in developed countries. This article examines whether corporate credibility is related to firm performance using Economic Observer’s rating of corporate credibility in China, the largest emerging market...
| Main Author: | |
|---|---|
| Contributors: | |
| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Journals Online & Print: | Drawer...
|
| Interlibrary Loan: | Interlibrary Loan for the Fachinformationsdienste (Specialized Information Services in Germany) |
| Published: |
2009
|
| In: |
Journal of business ethics
Year: 2009, Volume: 90, Issue: 2, Pages: 221 |
| Further subjects: | B
corporate credibility
B Emerging markets B Corporate Reputation B Market value B Financial Performance |
| Online Access: |
Volltext (lizenzpflichtig) |
| Summary: | Prior research suggests that corporate credibility is associated with firm financial performance in developed countries. This article examines whether corporate credibility is related to firm performance using Economic Observer’s rating of corporate credibility in China, the largest emerging market in the world. Based on a four-stage valuation model, we find that more reputable and credible firms outperform those with low ratings by almost 20% in 3-year stock returns and have better 3-year net profit margins, return on equity, and sales growth. This study is the first to directly examine the relationship between corporate credibility and firm performance in emerging markets such as China, and our results confirm that firms with high credibility exhibit better financial and market performance at least in the following 3 years. |
|---|---|
| ISSN: | 1573-0697 |
| Contains: | Enthalten in: Journal of business ethics
|
| Persistent identifiers: | DOI: 10.1007/s10551-009-0038-8 |