Corporate Reputation vs Marginal Cost: An Empirical Analysis

Open Access
Author:
Jiang, Huijing
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Stephen Ross Yeaple, Thesis Supervisor
  • David Shapiro, Honors Advisor
Keywords:
  • Corporate Reputation
  • Related Party Trade
  • Multinational Corporations
  • Environmental Performance Index
  • Empirical Analysis
Abstract:
In the 2011 paper “Corporation Reputation and Firm Performance: Empirical Literature Evidence” by Ronald Chibuike Iwu-Egwuonwu, the author performed empirical studies on corporate reputation with emphasis on how it can help organizations achieve strong competitive advantage, enhance stock market performance as well as performance values on other measures. Firms today compete in a fast globalized environment where tangible assets are no longer the drivers of growth and profits. Instead, cultivating a strong reputation is essential for multinational corporations (MNCs) to enhance financial performance. A decade ago, MNCs were much more focused on the bottom line and sought out third world countries as suppliers with low marginal cost and low material/labor costs. Has there been a shift recently? Do MNCs today care more about their reputation than high bottom line profits? In this thesis, I will attempt to answer that question by looking at the effects of environmental measures on U.S. imports.