Investing in Reputation
Keywords:
business, economics, corporate reputation, Harris Poll Reputation Quotient, trading strategy, Fama and FrenchAbstract
This paper examines whether consideration of corporate reputation is useful in forming investment portfolios. Portfolios are constructed using the Harris Poll Reputation Quotient and rebalanced periodically. We find that an equally-weighted allocation consisting of stocks with high corporate reputation outperformed those with low reputation and benchmarks. Individual investors can incorporate these findings in making portfolio decisions that consider social values as well as in generating wealth and managing risk.
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