Beyond Labels: Unveiling the Interplay Between Identity and Name Changes in Firm Performance

Abstract

Despite the increasing prevalence of corporate name change (CNC) in tandem with a growing body of research on the subject, the boundary and contextual conditions under which CNC yield beneficial or detrimental effects remain underexplored in the current literature. Integrating organizational identity literature and the resource‐based perspective, we examine the boundary and contextual conditions under which name changes impact firm performance. Utilizing financial data from the Financial Analysis Made Easy (FAME) database and focusing on key variables (i.e., degree of internationalization (DOI), international geographical spread (IGS), firm size (FSIZE), country of destination (COD), and firm international or domestic status (STATUS)), we found that companies enjoy superior performance following CNCs. Additionally, the results show that DOI, IGS, and STATUS lead to lower performance after a CNC. However, FSIZE and COD have positive effects on the relationship between CNC and performance. We examine the key practical and theoretical implications.