The Influence of Corporate Reputation on Cost of Capital

This research verifies if there is a relation between the cost of capital and the reputation of the companies measured by the Corporate Monitor of Corporate Reputation (MERCO) ranking. It contributes to the literature, bringing a new proxy for measuring the reputation of companies (MERCO ranking). In addition, no other study was found in the Brazilian environment that directly relates corporate reputation to the cost of capital. The contribution of this study takes place in a context in which, due to the scarce and costly sources of financing, knowing the cost of capital and exercising an effective management of the available resources, are preponderant factors for the survival of companies in a competitive market.The research used the multiple linear regression method estimated by Fixed Effects with robust errors. The sample is made up of B3 listed companies in the periods of 2013, 2014, 2016 and 2017, with the final number of observations equal to 897. The year 2015 was out of the sample because this year the MERCO ranking was not published. The results indicate that companies listed on B3 ranked by MERCO have a lower cost of capital than the others, regardless of the position in which the company is in the MERCO ranking.