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Patriotic name bias and stock returns

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  • Benos, Evangelos
  • Jochec, Marek

Abstract

Companies whose names contain the words “America(n)” or “USA” earn positive abnormal returns of about 6% per annum during World War II, the Korean War, and the War on Terrorism. These abnormal returns are not realized immediately upon the outbreak of each of the wars but are accumulated gradually during wartime. Given that no such effect is observed for the Vietnam War, we hypothesize that major, victorious wars arouse investors' patriotic feelings and cause them to gradually and perhaps subconsciously gravitate toward stocks whose name has a patriotic flavor.

Suggested Citation

  • Benos, Evangelos & Jochec, Marek, 2013. "Patriotic name bias and stock returns," Journal of Financial Markets, Elsevier, vol. 16(3), pages 550-570.
    • Handle: RePEc:eee:finmar:v:16:y:2013:i:3:p:550-570
    DOI: 10.1016/j.finmar.2012.10.002
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    References listed on IDEAS

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    Cited by:

    1. Jaballah, Jamil & Peillex, Jonathan & Weill, Laurent, 2018. "Is Being Sharia compliant worth it?," Economic Modelling, Elsevier, vol. 72(C), pages 353-362.
    2. Stepan Jurajda & Dejan Kovac, 2016. "What's in a Name in a War," CERGE-EI Working Papers wp573, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Corbet, Shaen & Hou, Yang & Hu, Yang & Lucey, Brian & Oxley, Les, 2021. "Aye Corona! The contagion effects of being named Corona during the COVID-19 pandemic," Finance Research Letters, Elsevier, vol. 38(C).
    4. Assaf, Rima & Gupta, Deeksha & Kumar, Rahul, 2023. "The price of war: Effect of the Russia-Ukraine war on the global financial market," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).
    5. Haizhong Wang & Hong Yuan & Xiaolin Li & Huaxi Li, 2019. "The impact of psychological identification with home-name stocks on investor behavior: an empirical and experimental investigation," Journal of the Academy of Marketing Science, Springer, vol. 47(6), pages 1109-1130, November.
    6. Ma, Yaming & Duan, Qiqi & Wu, Hanhong, 2021. "Does a stock's name affect its return? Evidence from the Chinese stock market during the China–US trade conflict," Finance Research Letters, Elsevier, vol. 40(C).
    7. Arpita Agnihotri & Saurabh Bhattacharya, 2017. "Corporate Name Change and the Market Valuation of Firms: Evidence from an Emerging Market," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 24(1), pages 73-90, January.
    8. 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.
    9. Elina Pradkhan, 2016. "Impact of culture and patriotism on home bias in bond portfolios," Review of Managerial Science, Springer, vol. 10(2), pages 265-301, March.
    10. Aymen Karoui & Sadok El Ghoul, 2022. "Fund names versus family names: Implications for mutual fund flows," The Financial Review, Eastern Finance Association, vol. 57(3), pages 509-531, August.

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    More about this item

    Keywords

    Patriotism; Name bias; Stock returns;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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