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Surfing the green wave: What's in a "green" name change?

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  • Latino, Carmelo

Abstract

This paper investigates stock market reaction to greenwashing by analyzing a new channel whereby companies change their names to green-related ones (i.e., names that evoke green and sustainable sentiments) to persuade the public that their activities are green. The findings reveal a striking positive stock price reaction to the announcement of corporate name changes to green-related names only for companies not involved in green activities at the time of the announcement. However, over an extended period of time, companies unrelated to green activities experience substantial negative abnormal returns if they fail to align their operational focus with the new name after the change.

Suggested Citation

  • Latino, Carmelo, 2023. "Surfing the green wave: What's in a "green" name change?," SAFE Working Paper Series 410, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:280965
    DOI: 10.2139/ssrn.4670504
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    More about this item

    Keywords

    Corporate Social Responsibility; Sustainable Investments; Greenwashing; Corporate Name Change;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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