Corporate Reputation and Performance: A Legitimacy Perspective

Objective: The objective of this paper is to investigate the mediating role of innovation legitimacy between corporate reputation and enterprise growth. Research Design & Methods: Four hypotheses were formulated and tested in to achieve the research objective. We collected data from 191 enterprises in 16 provinces in China. In total, 300 enterprises were selected to participate in this study. Descriptive analyses showed that the valid data covered a wide range of samples in terms of enterprise types and sizes, industries, market positions and years of establishment. The data was analysed by regression analysis. Findings: The results of this research suggest that corporate reputation has significant positive relationship with enterprise growth. This positive relationship was found through all pathways tested. This means that brand image, social responsibility, innovation capability and staff quality are all important to enterprise growth. Similar effects were found for innovation legitimacy on enterprise growth, indicating that legitimacy is an important theoretical perspective in understanding how businesses could develop in various important aspects. Implications & Recommendations: Legitimacy is an important theoretical framework in understanding the complex relationships between corporate reputation and enterprise growth, especially from the innovation perspective. Future research may look into these results in other contexts and further pursue the legitimacy perspective in understanding corporate reputation and enterprise growth. Contribution & Value Added: This research contributes towards understanding the mediating effects of innovation legitimacy between corporate reputation and performance, especially in Chinese context.