The Sociopolitical Implications of Firm Reputation: Firm Financial Reputation x Social Reputation Interaction on Firm Financial Performance

The purpose of this investigation is to examine how different dimensions of firm reputation interact to predict firm financial performance. Specifically, we draw on the tenets of stakeholder theory to argue that firm managers can optimize their financial performance by minding their financial and social reputations. If firm managers fail to establish a sound financial reputation, then their financial performance suffers, and especially does so if the firm has dedicated resources to maintaining a strong social reputation. Time separated data from 393 firms supported our hypotheses that financial performance is predicted by financial reputation, and that this relationship is moderated by social reputation. Implications, limitations, and areas for future research are discussed.