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What's in a name? What leads a firm to change its name and what the new name foreshadows

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  • Wu, YiLin

Abstract

This paper examines corporate name changes. This paper connects different types of corporate name changes to the reputational concerns that precede them and to the important corporate events and performance changes that follow them. The empirical results suggest that a firm adopts a radically different name to disassociate from a poor reputation, the name of one of its well-recognized brands to associate with a good reputation, or a minor change in its name by adding or deleting a part of its name that identifies it with a particular product to accompany a narrower business focus or a broader business focus. The empirical results also suggest that, except for radical name changes, significant organizational upheaval follows most corporate name changes. The strength of the firm's subsequent economic performance is tied to changes in the business direction that the type of name change foreshadows.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jbfina:v:34:y:2010:i:6:p:1344-1359
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    Citations

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    Cited by:

    1. Kot, Hung Wan, 2011. "Corporate name changes: Price reactions and long-run performance," Pacific-Basin Finance Journal, Elsevier, vol. 19(2), pages 230-244, April.
    2. Green, T. Clifton & Jame, Russell, 2013. "Company name fluency, investor recognition, and firm value," Journal of Financial Economics, Elsevier, vol. 109(3), pages 813-834.
    3. Xing, Xuejing & Anderson, Randy I. & Hu, Yan, 2016. "What׳s a name worth? The impact of a likeable stock ticker symbol on firm value," Journal of Financial Markets, Elsevier, vol. 31(C), pages 63-80.
    4. Kashmiri, Saim & Mahajan, Vijay, 2015. "The name's the game: Does marketing impact the value of corporate name changes?," Journal of Business Research, Elsevier, vol. 68(2), pages 281-290.
    5. Ahmed, Muhammad Usman & Kristal, Mehmet Murat & Pagell, Mark, 2014. "Impact of operational and marketing capabilities on firm performance: Evidence from economic growth and downturns," International Journal of Production Economics, Elsevier, vol. 154(C), pages 59-71.
    6. YiLin Wu, 2011. "Brand Reputation and the Cost of Capital: Evidence of Adopting a Brand Name as the Corporate Name," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 15(2), pages 29-63, Winter.

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