Abstract
This paper examines the association of corporate reputation and operating performance on a balanced panel data sample of 49 FTSE UK firms over the period 2005-2015. Analysing 169,994 news media articles from four main UK newspapers (Financial Times, The Times, The Guardian and The Mirror), I construct a novel corporate reputation measure advancing methodologically the conceptualisation of this important intangible asset. Next, the association of corporate reputation and operating performance (ROA, EBITDA), as well as with profit drivers (sales, profit margin, operating expenses and salaries expenses) are investigated. Results from regression analysis provide evidence that corporate reputation has a strong positive association with operating performance, sales growth and profit margins and outperforms Britain’s Most Admired Companiesranking (used as a benchmark) as an explanatory variable. However, the study was not able to provide any evidence of a significant association between corporate reputation and operating expenses or salaries expenses. Nevertheless, this study contributes to the academic literature on unrecorded intangible assets by introducing a new (objective) measure of corporate reputation and providing evidence of its association with operating performance through various profit drivers.