Corporate Reputation: A Combination of Social Responsibility and Industry

Abstract

We use the technique of panel data in a sample of 320 American listed companies from 2003 to 2007 to estimate a model of corporate reputation, measured by the Fortune index. We propose that corporate social responsibility (CSR) is a key driver of corporate reputation given its potential to foster hard-to-duplicate competitive advantage. Our model embodies the multidimensional concept of CSR, presenting a five dimensional construct - employee relations, diversity issues, product issues, community relations, and environmental issues - and interact those with industrial effects. Our results indicate that the five dimensions of CSR have a significant impact on corporate reputation and this impact is moderated by the industry of the firm. The most salient dimensions were diversity of the work force - was positively relevant to eight of the nine industries; and product issues with a positive impact in five industries and negative in three. © 2012 John Wiley & Sons, Ltd and ERP Environment.