Reputation for Quality or Prominence: What Matters More – and Why?

Abstract

There is broad consensus in the strategic management and organization studies literature that reputation has a positive effect on performance. An unsettled question is how reputation exerts its influence. The literature suggests two different primary pathways. The first is based on mechanisms of economic organization, including transaction costs economics and the resource-based view of the firm, while the second is based on social construction processes. We use meta-analysis to integrate the accumulated evidence and also structural equation modeling to compare the theorized pathways for reputation effects. Our results indicate that reputation effects are stronger via the pathway suggested by..