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The study aims to examine the relation between corporate reputation and a firm’s systematic risk for top performing Indian companies.

The paper uses Panel regression analysis of the data from the top 500 listed Indian companies constituting the BSE500 index over a 15-year period from 1 April 2002–31 March 2017. Firm age and shareholders’ return have been used as proxy of firm reputation. This paper use signalling theory to explain the impact of corporate reputation on market risk where proxy for the corporate reputation is seen as an information available to the market.

The findings show a significant positive impact of corporate reputation on systematic risk, indicating that a firm’s systematic risk increases with its reputation. Specifically, the findings suggest that reputed firms experience increased levels of market risk and scrutiny from stakeholders.

The results will help corporate managers from developing economies where corporate reputation plays an important role in determining the investment behaviour.

This study deploys two broad approaches to measure reputation and discern its impact on risk, such as reputation among financial stakeholders and reputation among public stakeholders on market risk, specifically on fast emerging Indian market.