2022
DOI: 10.1111/eufm.12391
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Company name fluency and acquisition target analysis

Abstract: This paper investigates the impact of company name fluency on acquisitions. We hypothesize that a company's name fluency, used by potential acquirers as a mental shortcut, influences not only its visibility to investors but also the level of interest from potential acquirers, increasing the company's acquisition probability. After correcting for endogeneity, company name fluency is positively associated with both the probability of being an acquisition target and an acquisition premium. Reasons for a higher ac… Show more

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Cited by 3 publications
(2 citation statements)
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“…Company names also have an obvious "psychological" side (Bulatovi c et al, 2016), which has been underpinned through many name studies based on psychological or linguistic methods. This reveals the importance of giving the company the "right" name in the technical sense: Arora et al (2015), Fox (2011), Liu (2021); Hsu et al (2022) and many more. These efforts are not in vain: according to Green and Jame (2013), fluent company names are higher valued and awake more investor interest.…”
Section: Introduction and Goalsmentioning
confidence: 98%
“…Company names also have an obvious "psychological" side (Bulatovi c et al, 2016), which has been underpinned through many name studies based on psychological or linguistic methods. This reveals the importance of giving the company the "right" name in the technical sense: Arora et al (2015), Fox (2011), Liu (2021); Hsu et al (2022) and many more. These efforts are not in vain: according to Green and Jame (2013), fluent company names are higher valued and awake more investor interest.…”
Section: Introduction and Goalsmentioning
confidence: 98%
“…On the one hand, the psychology literature shows that individuals judge fluent stimuli more positively than nonfluent ones (Schwarz, 2004;Oppenheimer, 2006;Song and Schwarz, 2009). Experimental and field evidence suggests that this bias may also affect financial decisionmaking (Alter and Oppenheimer, 2006Shah and Oppenheimer, 2009;Silva et al, 2016;Chan et al, 2018;Schwarz et al, 2021;Hsu et al, 2022). Green and Jame (2013) conclude that investors may indeed exhibit a naive preference, or ''affect'', for fluency, and bid up the prices of fluently-named stocks (henceforth: ''fluent stocks'').…”
Section: Introductionmentioning
confidence: 99%