How relational capital mediates the effect of corporate reputation on competitive advantage: Evidence from Taiwan high-tech industry

• This study uses hierarchical regression based on a sample of high-tech companies.
• Reputation affects relational capital, and then affects competitive advantage.
• Corporate reputation does not support the direct effect on competitive advantage.
• Relational capital is a complete mediator.

Although the effects of corporate reputation on competitive advantage are well documented, the mechanisms that explain those effects remain unclear. We develop and test a theoretical model to investigate how relational capital mediates the impact of corporate reputation on competitive advantage. The hypotheses were tested using a sample of Taiwanese high-tech firms during the period of 2002–2011. Results from hierarchical regression analyses support the contention that corporate reputation positively affects relational capital, which then positively affects competitive advantage. But surprisingly, we do not find support for the direct effect of corporate reputation on competitive advantage, and we instead find that relational capital is a complete mediator.