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Names and Reputations: An Empirical Analysis

Names and Reputations: An Empirical Analysis Abstract This paper tests several predictions from the literature on firm reputation, and confirms a main result: poor performance leads a firm to conceal its reputation. A residential plumbing firm with a record of complaints one standard deviation above the mean is 133.2 percent more likely to change its name. In addition, firms with longer track records are less likely to change their names or exit, while firms with more firm-specific investments, such as advertising, are more likely to change their names than exit. In addition, firms in small markets value their reputations comparatively more than firms in large markets. (JEL L14, L25, L84 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Microeconomics American Economic Association

Names and Reputations: An Empirical Analysis

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Publisher
American Economic Association
Copyright
Copyright © 2011 by the American Economic Association
Subject
Articles
ISSN
1945-7685
eISSN
1945-7685
DOI
10.1257/mic.3.3.193
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper tests several predictions from the literature on firm reputation, and confirms a main result: poor performance leads a firm to conceal its reputation. A residential plumbing firm with a record of complaints one standard deviation above the mean is 133.2 percent more likely to change its name. In addition, firms with longer track records are less likely to change their names or exit, while firms with more firm-specific investments, such as advertising, are more likely to change their names than exit. In addition, firms in small markets value their reputations comparatively more than firms in large markets. (JEL L14, L25, L84 )

Journal

American Economic Journal: MicroeconomicsAmerican Economic Association

Published: Aug 1, 2011

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