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Stock name length and high visibility premium

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  • Jin, XueJun
  • Shen, YiFan
  • Yu, Bin

Abstract

High stock visibility reduces the cost of capital and creates high firm value. In China's A-share market, only 427 stocks have a three-character name, while almost 3000 stocks have four-character names; we use posts read and reply at BBS to verify the high visibility of former. We then use stock name length as the measure of stock visibility and examine abnormally high returns of stocks with high visibility. We find that the premiums of three-character length name stocks exist after controlling for systematic risks, and that premiums could decrease when the information environment for stocks improves.

Suggested Citation

  • Jin, XueJun & Shen, YiFan & Yu, Bin, 2021. "Stock name length and high visibility premium," Finance Research Letters, Elsevier, vol. 39(C).
    • Handle: RePEc:eee:finlet:v:39:y:2021:i:c:s1544612320304992
    DOI: 10.1016/j.frl.2020.101595
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    References listed on IDEAS

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    Cited by:

    1. Montone, Maurizio & van den Assem, Martijn J. & Zwinkels, Remco C.J., 2023. "Company name fluency and stock returns," Journal of Behavioral and Experimental Finance, Elsevier, vol. 39(C).

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    More about this item

    Keywords

    Stock name; Stock visibility; Investor base; Information environment;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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