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Name complexity, cognitive fluency, and asset prices

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  • Chenjun Fang
  • Ning Zhu

Abstract

We document three interesting phenomena in the Chinese stock market related to the complexity of stock tickers: Companies with more complex stock tickers are (1) held by fewer investors; (2) witness a lower turnover; and (3) experience lower returns during post‐IPO period. The change‐in‐change analysis based on ticker‐changing events generates consistent results. Such results are strong among companies with a higher level of individual investor ownership and stronger information asymmetry. Our findings confirm and extend Green and Jame (Journal of Financial Economics, 2013, 109:813–834) and support that cognitive fluency and name recognition influence investor behavior and asset prices.

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  • Chenjun Fang & Ning Zhu, 2019. "Name complexity, cognitive fluency, and asset prices," Review of Financial Economics, John Wiley & Sons, vol. 37(1), pages 168-196, January.
    • Handle: RePEc:wly:revfec:v:37:y:2019:i:1:p:168-196
    DOI: 10.1002/rfe.1050
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