_CULTURE SOCIETY Marketing

_The Value of Reputation

A country’s rising or falling reputation has direct economic impact.

_Daniel Korschun

Korschun is an assistant professor of marketing at LeBow College of Business and a fellow of both the Center for Corporate Reputation Management and the Center for Corporate Governance at LeBow.

_Boryana Dimitrova

Dimitrova is and assistant clinical professor of marketing and faculty in Drexel’s LeBow College of Business.

Marketing professors Daniel Korschun and Boryana Dimitrova and economics professor Yoto Yotov from the LeBow College of Business found that something as intangible as a country’s “reputation” can, in fact, have very tangible economic consequences.

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Above are the worldwide reputation rankings according to the 2018 Anholt-GfK Nation Brands Index. The U.S. came in 6th.

The researchers chose to use the 2008 Anholt-GfK Nation Brands Index to determine reputation and compared it to corresponding trade data from the United Nations Statistical Division Commodity Trade Statistics Database for 2010. They specifically looked at the impact on exports between 861 pairs of countries.

The results showed a 2 percent decrease in export volume for each spot a country dropped in the reputation rankings. Conversely, the study found that an increase in reputation had an equally positive impact on exports.

What this means in a practical example is that if the United States were to drop by just one place in a world ranking among Canadians, the model would predict a drop of more than $5 billion in U.S. exports to that country.

“Countries ignore their international reputations at their peril,” says Korschun. “If the current administration is serious about increasing U.S. exports, a good place to start would be improving America’s standing in the world.”