The impact of city reputation on city performance

ABSTRACT

Studies have found that good corporate reputation benefits firm outcomes. Our research tests whether these benefits also hold for city reputation. We use a sample of 76 Spanish cities to analyse the effect of city reputation on city performance as measured by city economic activities, unemployment rates and net migration rates. After controlling for endogeneity and spatial autocorrelation, we find that good city reputation is positively associated with economic activities and negatively with unemployment, but not related to net migration. Our results may be of interest to local authorities, as they indicate the relevance of efforts to consolidate city reputation.

KEYWORDS:

• city reputation
• performance
• stakeholders
• unemployment
• migration

JEL:

• C31
• J60
• O40
• R11

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

ORCiD

Juan B. Delgado-García http://orcid.org/0000-0003-0620-8219

Esther de Quevedo-Puente http://orcid.org/0000-0001-9761-0742

Virginia Blanco-Mazagatos http://orcid.org/0000-0002-1201-0922

Notes

1. Several examples of competition between local authorities can be mentioned. Carmeli (2002) provides an interesting example on the competition between Tel Aviv–Jaffa and Ramat Gan in their efforts to attract and preserve businesses in their respective jurisdictions. Wæraas (2015) also shows how Norwegian municipalities seek to be more different in those areas in which they perceive high levels of competition (e.g., attracting business ventures).

2. From the initial sample, two cities were discarded because additional information needed for the analysis was not available.

3. The INE provides information for 72 of the 76 cities in our sample.

4. Since dependent variables are corrected for city population, we performed regression analyses including and excluding city size as a control variable. The results remained very similar, so that for simplicity we report only results for models including city size.

5. We also tested models by splitting port and airport activities according to the size of the cities in a province. These models show very similar results for our independent variable.

Additional information

Funding

The authors acknowledge the financial support provided by the Ministerio de Educación y Ciencia (Spanish Ministry of Education and Science) [research project number CS02009-08599].