Advanced Search
MyIDEAS: Login to save this article or follow this journal

Brand Reputation and the Cost of Capital: Evidence of Adopting a Brand Name as the Corporate Name

Contents:

Author Info

  • YiLin Wu

    (National Taiwan University)

Registered author(s):

    Abstract

    This paper studies how the capital market perceives brand name adoption. I distinguish between brand adoption and radical type of corporate name change. A brand adoption name change occurs when the firm adopts one of its well-established brands as its new corporate name and a radical type occurs when the new name is semantically unrelated to firm history. Improved profitability and increased net investment accompany brand name adoption. After controlling for changes in the competing information sources, the accompanying improved economic performance, and the endogeneity of the decision to adopt a brand name, I find that, while there are no intertemporal variations in the cost of capital for a radical name change, a brand name adoption is associated with a lower cost of capital following the name change, suggesting that brand reputation is a valuable asset.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://jefsite.org/RePEc/pep/journl/jef-2011-15-2-c-wu.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Pepperdine University, Graziadio School of Business and Management in its journal Journal of Entrepreneurial Finance.

    Volume (Year): 15 (2011)
    Issue (Month): 2 (Winter)
    Pages: 29-63

    as in new window
    Handle: RePEc:pep:journl:v:15:y:2011:i:2:p:29-63

    Contact details of provider:
    Postal: 24255 Pacific Coast Hwy, Malibu CA
    Web page: http://bschool.pepperdine.edu/jef
    More information through EDIRC

    Related research

    Keywords: Cost of Capital; Brand; Discount for Lack of Brand;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Michael J. Cooper, 2001. "A Rose.com by Any Other Name," Journal of Finance, American Finance Association, vol. 56(6), pages 2371-2388, December.
    2. Wu, YiLin, 2010. "What's in a name? What leads a firm to change its name and what the new name foreshadows," Journal of Banking & Finance, Elsevier, vol. 34(6), pages 1344-1359, June.
    3. Paul J. Irvine & Jeffrey Pontiff, 2009. "Idiosyncratic Return Volatility, Cash Flows, and Product Market Competition," Review of Financial Studies, Society for Financial Studies, vol. 22(3), pages 1149-1177, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:pep:journl:v:15:y:2011:i:2:p:29-63. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Craig Everett).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.