The Value of Corporate Reputation in the Bankruptcy Risk
Ana María Casado, Estela R. Yánez, Andrea Peláez
In recent years CR has been considered by experts as one of the
most important intangibles assets for sustainability of the
companies. Existing literature designates several positive aspects
of a good CR, highlighting that companies with better CR have
superior financial performance. In this sense, some recent
researches, conclude that a good CR decreases the risk for
companies, focusing on the relation between CR and the
variability of returns over a period of time. Nevertheless, as far as
we know, there are no studies analyzing the relation between CR
and bankruptcy risk, what it is an important component of the
unsystematic risk, and an aim element in Strategic Management.
This is why the aim of this paper is to show, based on empirical
evidence, that a good CR helps companies to minimize
bankruptcy risk. To answer this research question, a sample of
Spanish companies in the Share Market between 2008 and 2012
has been used, and an algorithm based on Generalized Regression
Neural Networks (GRNN). Results shown that a good CR is
positively related to a lower bankruptcy risk, and those models
built with GRNN are more robust than those others based on
traditional statistical techniques, like Multi-Linear Regression
models. Full Text
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