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Innovation's Role in the Formation of a Capital Market Reputation
Type
conference paper
Date Issued
2007-05-31
Abstract
The way a company is perceived on financial markets substantially affects its value as well as its capacity to raise much needed resources. Past research, however, has shown a tendency to neglect the specific factors and mechanisms that affect the judgements of financial analysts, institutional investors and business journalists. In our research, as presented in this abstract, we argue that capital market participants, when faced with the challenge of estimating the uncertain future prospects of a company, rely on collective judgements about that company, its reliability, stability and trustworthiness. In other words, the financial community attributes companies with a 'capital market reputation'. Depending on this reputation, capital market participants will be more or less critical of a company's announcements regarding its future development. They will also be more or less tolerant regarding unexpected business developments. The formation of a capital market reputation is determined by the financial community's perception of a range of specific corporate factors, presented in this paper.
Altogether, our research has shown that 'innovation' is one essential driver of a company's capital market reputation. In order to contribute to a company's value management, investor relations should pay close attention to this specific corporate factors that affects the judgements of capital markets participants. We believe that in this context our research offers useful indications for the implementation of investor relations plans and activities as well as for reputation building on financial markets.
Altogether, our research has shown that 'innovation' is one essential driver of a company's capital market reputation. In order to contribute to a company's value management, investor relations should pay close attention to this specific corporate factors that affects the judgements of capital markets participants. We believe that in this context our research offers useful indications for the implementation of investor relations plans and activities as well as for reputation building on financial markets.
Project(s)
Language
English
Keywords
Reputationsmanagement
Corporate Reptutation
Investor Relations
HSG Classification
contribution to scientific community
Refereed
Yes
Event Title
11th International Conference on Reputation, Brand, Identity & Competitiveness
Event Location
Oslo
Event Date
31.05.-02.06.2007
Subject(s)
Division(s)
Eprints ID
34320