Financial Flexibility, Perceived Economic Policy Uncertainty, and Corporate Reputation: Evidence from China

This paper investigates the impact of financial flexibility on corporate reputation using data from Chinese listed companies from 2010 to 2023. The results show that financial flexibility significantly enhances corporate reputation, with a 1% increase in financial flexibility leading to a 0.349% increase in reputation. However, this positive effect is weakened by higher perceptions of economic policy uncertainty. Further analysis reveals that the impact is more pronounced in non-state-owned enterprises and digital economy firms, while it is less significant in state-owned enterprises. The findings suggest that financial flexibility is crucial for firms facing higher market risks and rapid industry changes. The study highlights the importance of financial flexibility in reputation management and provides insights for policymakers and firms to enhance corporate reputation in uncertain economic environments.