The report, based on a survey of 48,000 people in the G8 countries, and an additional 30 000 in non-G8 states, put Norway ahead of the other Scandinavian countries, Australia and The Netherlands, all of which have scored well in the survey in the past.
In the survey, respondents were asked general questions such as whether they had a “good feeling” about a country, and whether it had a “good overall reputation”.
The firm, which is based in Boston and Copenhagen, produces the Country RepTrak report to advise countries on how to boost their global reputation.
Canada, which won top position in this year's ranking has come out as the winner four times out of the six years the report has been produced.
Fernando Prado, managing partner at the Reputation Institute, thinks that a country's reputation is important if it wants to draw visitors.
"When people perceive a country positively based on their direct experiences and through the lens of others, that translates into increased tourism dollars,” he told the UK's Independent newspaper.
"That's because a country's reputation dictates supportive behaviours such as the willingness of people to visit that country."
Audun Pettersen of Innovation Norway told Dagbladet newsaper that foreigners often had only a vague impression of Norway, often associated with nature and fjords, but that they also felt it had a strong and open society.
”We know that attention in international press awakens an interest in travel, and that it makes us visible in the competitive international tourism business,” he told Norway's Dagbladet newspaper.
The report highlights that it is not necessarily the world's most powerful countries, or the countries with the largest economies that enjoy the best reputation. The US came in 22nd in this year's report.