Reputation and value creation: A circular relation. Application to the Spanish banking sector

This paper is based on agency theory framework and gives an essential justification to the concept of reputation, adding to its function as an informative signal, that of guarantee of contracts. In addition, this contractual approach leads us to a new definition of corporate reputation, one that not only introduces the perceptions of how the firm behaves towards its stakeholders, but also takes into account the degree of informative transparency with which the firm develops relations with them. Using this new and more complete definition, a questionnaire to measure this asset was designed, which was then applied to the Spanish banking sector. Overall, what comes to light is the relation between size and geographical area and the reputation of the firm with its internal stakeholders, since the big national entities, whether they are savings banks or banks, have a better position on this axis.