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Corporate name changes: Price reactions and long-run performance

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  • Kot, Hung Wan

Abstract

Stock price reactions and long-run performance after a corporate name change are investigated using a sample of Hong Kong listed companies spanning 1999 to 2008. Corporate name changes are classified into four types. Investors react positively around the announcement date to changes announced as being due to a merger or acquisition, a restructuring or a change in business type. Name changes to provide clarity or for reputational reasons generate no stock price reaction. No abnormal trading activity is detected around the announcement and in the post-event period. There is very weak evidence of a relationship between long-run abnormal stock returns, operating performance changes and corporate name changes. The results suggest that name changes have short-term stock price effects but no long-term relationship with stock price or operating performance.

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  • 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.
    • Handle: RePEc:eee:pacfin:v:19:y:2011:i:2:p:230-244
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    5. Dejun Xie & Ziyue Yan & Yiyao Xu & Siyang Weng & Chirui Zhang, 2020. "An Event Based Study on the Name Change Effect on A-Share Quoted Firm Values," Journal of Statistical and Econometric Methods, SCIENPRESS Ltd, vol. 9(4), pages 1-11.
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    8. 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.
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