How does Online Sentiment Affect Financial Evaluations?
The aim of this paper is to deepen the understanding of the relationship between corporate reputation and financial value. Theories as the resource based view or the contractual view lie ground for the assumption of a linear positive correlation between reputation and financial performance. However, existing empirical studies have provided conflicting results regarding the direction and strength of this relationship so far. In this paper we claim that the assumption of a direct linear correlation between corporate reputation and financial value misrepresents current financial practices and underestimates the complexity of the calculative situations in which values are set on financial markets. Based on in-depth interviews with traders, equity analysts and financial tool developers about the real use of reputation measurement tools, we argue that reputation data rather function as interpretative frames within which other information acquire significance.