Impact of Corporate Name Change on Stock Prices: Evidence from BSE

Authors

  • Priyanka Goyal Research scholar, University Business School, Panjab University, Chandigarh, India
  • Mansi Goyal MBA student, Indian Institute of Management, Sirmaur, India

DOI:

https://doi.org/10.48165/gmj.2022.17.1.10

Keywords:

Event study methodology, Corporate name change, Shareholder’s wealth, Abnormal returns

Abstract

The study examines the impact of the corporate name change on stock  prices. By employing the event study methodology, efforts have been  made to analyze how the market reacts to the corporate name change  of companies during the years 2019 and 2020 listed on the Bombay  Stock Exchange (BSE). The results suggested that corporate name  change hardly impacts stock prices and shareholders’ wealth. Our  findings also indicated that investors are rational in India. The t-test  has been used to test the significance of the results. The study adds to  the literature as few studies have been conducted in the Indian context  that analyzed the impact of the corporate name change on stock  market reactions and has provided inconclusive results. 

Downloads

Download data is not yet available.

References

Agnihotri, A., & Bhattacharya, S. (2017). Corporate Name Change and the Market Valuation of Firms: Evidence from an Emerging Market. International Journal of

the Economics of Business, 24(1), 73–90. https://doi. org/10.1080/13571516.2016.1253186

Biktimirov, E. N., & Durrani, F. (2017). Market reactions to corporate name changes: evidence from the Toronto Stock Exchange. International Journal of Managerial Finance, 13(1), 50–69. https://doi.org/10.1108/IJMF

-2015-0154

Bosch, J.-C., & Hirschey, M. (2012). The Valuation Effects of Corporate Name Changes. Financial Management Association International, 18(4), 64–73. https://doi. org/10.1108/03074350910935812

Cooper, M. j., Dimitrov, O., & Rau, P. R. (2001). A Rose. com by any other name. The Journal of Finance, 56(6), 2371–2388. https://doi.org/10.1111/0022- 1082.00408

Fama, E., Fisher, L., Jensen, M., & Roll, R. (1969). The Adjustment of Stock Prices to New Information. International Economic Review, 10(1), 1. https://doi. org/10.2307/2525569

Gill, S. (2012). Upward Switches on BSE: An Explanation for Anomalous Stock Price Behaviour. Vikalpa, 37(4), 11–28. https://doi.org/10.1177/0256090920120402

Glynn, M. A., & Abzug, R. (2002). Isomorphism Identity: Symbolic Institutionalizing Names. Academy of Management Journal, 45(1), 267–280.

Gupta, M., & Aggarwal, N. (2014). The Impact of Stock Name Change on Shareholder Wealth: Evidence from Indian Capital Markets. Journal of Management Research, 14(1), 15–24. https://doi.

org/10.4324/9781315819198

Horsky, D., & Swyngedouw, P. (1987). Does it Pay to Change Your Company’s Name? A Stock Market Perspective. Marketing Science, 6(4), 320–335. https://doi.org/10.1287/mksc.6.4.320

Howe, J. S. (1982). a Rose By Any Other Name? a Note on Corporate Name Changes. Financial Review, 17(4), 271–278. https://doi.org/10.1111/j.1540-6288.1982. tb00510.x

Josev, T., Chan, H., & Faff, R. (2004). What’s in a name? Evidence on corporate name changes from the Australian capital market. Pacific Accounting Review, 16(1), 57–75. https://doi.

org/10.1108/01140580410818469

Kadapakkam, P., & Misra, L. (2007). What’s in a Nickname? Price and Volume Effects of a Pure Ticker Symbol Change. The Journal of Financial Research, XXX(1), 53–71.

Karbhari, Y., Sori, Z. M., & Mohamad, S. (2004). Shareholder wealth effects and corporate name change: Evidence from Malaysia. Corporate Ownership and Control, 2(1), 38–49. https://doi.

org/10.22495/cocv2i1p3

Karim, B. (2011). Corporate name change and share holder wealth effect: Empirical evidence in the French Stock Market. Journal of Asset Management, 12(3), 203–213. https://doi.org/10.1057/ jam.2011.9

Karpoff, J. M., & Rankine, G. (1994). In search of a signaling effect: The wealth effects of corporate name changes. Journal of Banking and Finance, 18(6), 1027–1045. https://doi.org/10.1016/0378-

(94)00058-1

Kashmiri, S., & Mahajan, V. (2015). The name’s the game: Does marketing impact the value of corpo rate name changes? Journal of Business Research, 68(2), 281–290. https://doi.org/10.1016/j.jbus res.2014.07.007

Koku, P. S. (1997). Corporate name change sig naling in the services industry. Journal of Services Marketing, 11(6), 392–408. https://doi. org/10.1108/08876049710187491

Kot, H. W. (2011). Corporate name changes: Price reac tions and long-run performance. Pacific Basin Finance Journal, 19(2), 230–244. https://doi. org/10.1016/j.pacfin.2010.10.003

Lee, P. M. (2001). What’s in a name.com?: The effects of “.com” name changes on stock prices and trading activity. Strategic Management Journal, 22(8), 793– 804. https://doi.org/10.1002/smj.177

Mase, B. (2009). The impact of name changes on company value. Managerial Finance, 35(4), 316–324. https:// doi.org/10.1108/03074350910935812

Muzellec, L. (2006). What is in a Name Change? Re-Joycing Corporate Names to Create Corporate Brands. Corporate Reputation Review, 8(4), 305– 316. https://doi.org/10.1057/palgrave.crr.1540257

Sorescu, A., Warren, N. L., & Ertekin, L. (2017). Event study methodology in the marketing literature: an overview. Journal of the Academy of Marketing Science, 45(2), 186–207. https://doi.org/10.1007/

s11747-017-0516-y

Wu, Y. (2010). What’s in a name? What leads a firm to change its name and what the new name foreshad ows. Journal of Banking & Finance, 34(6), 1344-1359.

Downloads

Published

2023-03-20

Issue

Vol. 17 No. 1 (2023): Gyan Managment Journal, (Jan-Jun), 2023

Section

Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Goyal, P., & Goyal, M. (2023). Impact of Corporate Name Change on Stock Prices: Evidence from BSE . Gyan Management Journal, 17(1), 85–94. https://doi.org/10.48165/gmj.2022.17.1.10
Crossref
Scopus
Google Scholar
Europe PMC