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The name's the game: Does marketing impact the value of corporate name changes?

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  • Kashmiri, Saim
  • Mahajan, Vijay

Abstract

Each year, thousands of firms change their names, many in the absence of an accompanying M&A event. Existing research reveals significant heterogeneity in the stock market response to such pure name changes. Why do some firms reap greater stock market rewards for changing their names? Our study of name change announcements by 180 publicly listed U.S. firms reveals that marketing-related factors play a critical role in the value of corporate name changes: Firms with high marketing influence in their C-suite, high marketing investments, and high marketing capability receive greater stock market rewards for changing their names. Firms that change their names to leverage a strong brand in their portfolio, or to proactively communicate a change in their scope of business (i.e., a future change in their product portfolio or geographical markets), are also rewarded more than firms that change their names to retroactively align their names with a new scope.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:jbrese:v:68:y:2015:i:2:p:281-290
    DOI: 10.1016/j.jbusres.2014.07.007
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