Abstract

Firm celebrity and reputation are considered as valuable intangible resources leading to competitive advantages. Past research usually uses indirect measures, such as Fortune ratings or questionnaire surveys to examine the relationship between celebrity and reputation with firm financial performance. The follow-ship on microblogging services, such as Twitter, provides us an opportunity to measure the two assets directly. Constructing firm celebrity as the number of followers a firm has and firm eputation as the PageRank score of the firm, we discovered that both reputation and celebrity derived from social media have shown negative effects on firms' return on assets, but have positive relationships with market capitalization. This is to say, despite of their relative inabilities to generate profits, the management of firms with high reputation and level of celebrity achieved higher market values, which is one of the most important goals for all companies. Furthermore, we also compared the different effects between reputation and celebrity on firm financial performance. The results showed that the level of celebrity has a stronger positive relation with market capitalization than firm reputation. On the other hand, firm reputation has a stronger impact on cost of goods sold than celebrity.

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