Corporate reputation and shareholder investment: a study of Egypt's tourism listed companies

Abstract

Abstract Purpose This study aims to investigate the impact of corporate reputation on investors and whether it influences company investment returns. While previous research has focused on specific components of reputation, neglected risks associated with the analyzed firms, and relied on accounting performance metrics, this study takes into account both return and risk factors to examine how they affect corporate reputation and investment decision-making. Design/methodology/approach Data were collected from 300 active investors in the Egyptian exchange stock market, and the seven-paradigm RepTrak model was used to assess reputation structures and expected return and risk. Structural equation modeling was employed to confirm the theories. Findings The findings highlight that investors demonstrate a primary focus on the financial performance of organizations when making stock market decisions, while also considering non-financial factors such as products, innovation, citizenship, governance, and emotional appeal. Their prioritization of investment returns and risks takes precedence over evaluating workplace practices. Originality/value This study's originality lies in its incorporation of return and risk measurements as crucial investment choice variables, contributing to the financial markets’ research on corporate reputation. By managing their reputation, corporations can enhance investors’ demand for their stocks and optimize their investment opportunities.