What's in a name? What leads a firm to change its name and what the new name foreshadows
Journal
Journal of Banking and Finance
Journal Volume
34
Journal Issue
6
Pages
1344-1359
Date Issued
2010
Author(s)
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. ? 2009 Elsevier B.V. All rights reserved.
Subjects
Brand name capital; Corporate strategy; Intangible assets; Investor sentiment; Name change; Preplay communication; Propensity score matching; Reputation
Type
journal article