We demonstrate that eponymy-firms being named after their owners-is linked to superior firm performance, but is relatively uncommon (about 19 percent of firms in our data). We propose an explanation based on eponymy creating an association between the entrepreneur and her firm that increases the reputational benefits/costs of successful/unsuccessful outcomes. We develop a corresponding signaling model, which further predicts that these effects will be stronger for entrepreneurs with rarer names. We find support for the model's predictions using a unique panel dataset consisting of over 1.8 million firms. (JEL D82, L25, L26, M13) Many firms are eponymously named; that is, they bear the name of their owner. Leveraging a unique panel dataset, this paper demonstrates that eponymy is linked to superior firm performance. For instance, controlling for other characteristics, eponymous ventures generate, on average, a 3 percentage point greater return on assets (ROA), which is 35 to 55 percent of the magnitude of the relevant sample-average ROA.We propose a signaling explanation for the eponymy-performance relationship. Specifically, eponymy creates a stronger association between the entrepreneur and her firm that increases the reputational benefits or costs of having the market hold a favorable or unfavorable impression of her ability (or of the quality of her firm). Consequently, high-ability entrepreneurs are more drawn to eponymy than are low-ability ones.To formalize this explanation, we introduce a model, characterize its equilibrium, and derive its testable implications. We then demonstrate that the evidence is consistent with the predictions of the theory, using novel panel data on over 1.8 million European firms, covering the years 2002-2012.Eponymous Firms.-While there is growing interest in identifying firm characteristics associated with superior entrepreneurial performance, rarely do such characteristics represent choices available to all entrepreneurs. Selecting the name * Belenzon: The Fuqua School of Business, Duke University, 100 Fuqua Drive, Durham, NC 27708 (e-mail: sharon.belenzon@duke.edu); Chatterji: The Fuqua School of Business, Duke University, 100 Fuqua Drive, Durham, NC 27708 (e-mail: ronnie@duke.edu); Daley: The Fuqua School of Business, Duke University, 100 Fuqua Drive, Durham, NC 27708 (e-mail: bd28@duke.edu). The authors thank three anonymous referees and seminar participants at Harvard, MIT, Stanford, Northwestern, NBER, UCLA, and UVA for their useful comments. Chatterji gratefully acknowledges support from the Kauffman Foundation. The authors declare that they have no relevant or material financial interests that relate to the research described in this paper.† Go to https://doi.org/10.1257/aer.20141524 to visit the article page for additional materials and author disclosure statement(s).1639 Belenzon et al.: eponymous entrepreneurs Vol. 107 no. 6 of their firm, however, is an important and highly visible choice all new-business owners must make. Further, the entrepreneur is most li...
