Mediating effect of innovation capacity and moderating effects of internationalization and family membership on the relationship between corporate reputation and financial performance

In today's world where competition is getting faster and faster can a good reputation be a strategic resource for companies?. There is a widespread view that all the resources owned by companies do not provide a sustainable competitive advantage, but valuable, rare, inimitable and unsubstituted resources are considered as "strategic resources" and create a sustainable competitive advantage. A strong corporate reputation provides firms with bargaining power in the market, as well as superiority in agreements, reducing transaction costs and improving the financial performance of the firm by contributing to the increase in revenues. For this reason, having a good corporate reputation is among the issues that closely concern the performance of the company. When the relevant literature is examined, the relationship between financial performance and corporate reputation is generally considered one-dimensional and directly. In this study, in addition to the basic relationship between corporate reputation and financial performance, the mediator effect of the innovation capacity, the moderator effect of family membership in this relationship, and the moderator effect of the degree of internationalization between corporate reputation and innovation capacity are handled under a single model by using the framework and assumptions of resource-based approach and the institutional theory. To test these relationships, moderator and mediation models were used. The sample of the study consists of 175 observations belonging to 35 companies that are listed in the Turkey 100 list (Turkey's Most Respected Brands Report) published by Brand Finance between 2014-2018 and are listed in BIST. Panel EKK "Pooled Regression Model" was used in the study. In the model where resource-based approach and institutional theory are handled together, firstly, the direct effect of corporate reputation on the financial performance of companies is investigated. Findings provided evidence that financial performance (ROA) increases as corporate reputation increases. The results of the analysis conducted regarding the mediating effect of innovation capacity in the relationship between corporate reputation and financial performance prove that innovation capacity has a preventive intermediary effect in this relationship. Analysis findings of the moderator effect of the degree of internationalization shows that the degree of internationalization had a moderator effect in the relationship between corporate reputation and innovation. Finally, as a result of the analysis conducted on whether the existence of family membership has a moderator effect on the relationship between corporate reputation and financial performance, it was concluded that the relationship between corporate reputation and financial performance strengthens as family membership increases.