Corporate Reputation Effects Across Nations: The Impact of Country Distances and Firm-Specific Resources

CEOs are responsible for the development of a strong corporate reputation, which is increasingly used by multinational corporations as an important differentiation criterion in foreign markets. Because the effects of an often centrally managed but locally perceived reputation are likely to vary between countries, this study analyzes the moderating role of institutional distance and firm-specific resources on reputation effects in the chemical and pharmaceutical industry, two important aspects that have not been considered in consumer-centered corporate reputation research so far. The authors refer to signaling theory-advanced by institutional and resource-based thinking-and use data from 29,987 consumer evaluations of a multinational corporation in 43 countries. The results of the multilevel models indicate that distance between home and host countries weakens reputation effects on both consumer loyalty and trust, whereas firm-specific resources reinforce these effects. In particular, country experience and cultural-cognitive distance are important when managing reputations across nations because they explain high amounts of country-level variance.