Corporate Sustainability and Market Response According to the Name Change Strategy: Focusing on Korean IT Industry Firms

Abstract

This study seeks to determine whether corporate sustainability increases due to the corporate name change strategy by analyzing the sample of IT companies listed on the KOSDAQ market from 2010 to 2019, through the event study methodology and OLS regression. This study has the following conclusions: first, the analysis results show that if the market response to an IT company’s corporate name change is positive, its financial constraint improves after the name change. Second, even if the companies’ financial constraint conditions before the corporate name change differ, their financial constraints improve after the name change if the market response to their announcements to change their corporate names is favorable. In other words, in terms of corporate sustainability, the financial constraint of a company improves depending on how it establishes the strategy to change its corporate name as well as the level of the market response to the announcement to change its corporate name. This implies that an IT company’s strategy to change its corporate name can affect corporate sustainability. Consequently, from the perspective of IT companies, this study serves as a guide for stakeholders’ decision-making processes and proves that the financial constraint can be improved through a corporate name change strategy.

Analysis of Relationship between Long-Term Market Reaction and Financial Stability Resulting from Corporate Name Changes: Focusing on IT Firms

“…(1) Kscore 본 연구의 결과들이 시사하는 점들을 선행 연구들의 분석결과와 연계하여서 보면, 기업의 기업명 변경은 최근 기업의 시장가치에 긍정적인 영향을 미치고 있으며 (Park and Kim, 2012;Green and Jame, 2013;Rani and Asija, 2017;Zhao et al, 2018;Jain and Jain, 2019;Felix and von Eije, 2019;Park, 2019;Park andPark, 2019a, 2019b;Akyildirim et al, 2020;Sharma et al, 2020;Chen et al, 2022;Park et al, 2022a;Wu and Chen, 2022), 기업명 변경을 통하여 재무적 제약이 개선되고 있다 (Park et al, 2022b;Park and Shin, 2022) (Park and Kim, 2012;Green and Jame, 2013;Rani and Asija, 2017;Zhao et al, 2018;Felix and von Eije, 2019;Jain and Jain, 2019;Park, 2019;Park andPark, 2019a, 2019b;Akyildirim et al, 2020;Sharma et al, 2020;Chen et al, 2022;Park et al, 2022a;Wu and Chen, 2022)이나 기업명 변경 전후 단편적인 재무비율들의 변화 Kot, 2011;Park, 2019;Park andPark 2019a, 2019b)…”

“…대상으로 분석 (Song, 1991)이 진행되었거나, 기업명 변경 공시에 대한 주가반응 (Cornell and Shapiro, 1987;Horsky and Swyngedouw, 1987;Song, 1991;Cooper et al, 2001;Cooper et al, 2005;Lee, 2001;Delattre, 2002;Oh and Hyun, 2003;Oh, 2004;Karim, 2011;Park and Kim, 2012;Green and Jame, 2013;Agnihotri and Bhattacharya, 2017;Park, 2019;Park andPark, 2019a, 2019b;Feng et al, 2022), 그리고 IT, 블록체인, AI, 오일 등 특정 산업에 관련 용어로의 변경과 이에 따른 주가반응 (Park and Kim, 2012;Jain and Jain, 2019;Park and Park, 2019b;Akyildirim et al, 2020;Sharma et al, 2020;Wu and Chen, 2022)에 대한 연구들이 주로 진행되어 왔다. 그리고 재무적 효과 측면에서는 기업명 변경 전후로 하여 기업의 개별 재무비율들의 변화를 분석하여 기업명 변경이 기업가치에 미치는 영향을 분석 Kot, 2011;Park, 2019;Park andPark, 2019a, 2019b)하고는 있으나 종합적 차원에서의 재무 안정성의 개선효과를 분석한 연구는 Park and Shin(2022) (Howe, 1982;Karpoff and Rankine, 1994;Bosch and Hirschey, 1989;Karbhari et al, 2004;Kot, 2011)는 연구들과 기업의 가치를 하락시킨다는 연구 (Josev et al, 2004;Mase, 2009;Andrikopoulos et al, 2007;Devos et al, 2021;Feng et al, 2022), 그리고 기업명 변경이 기업의 가치를 상승시킨다 (Cornell and Shapiro, 1987;…”

“…우선 기업명 변경은 기업의 가치와 무관하다는 연구들 (Howe, 1982;Bosch and Hirschey, 1989;Karpoff and Rankine, 1994;Karbhari et al, 2004;Kot, 2011) (Josev et al 2004;Andrikopoulos et al, 2007;Mase, 2009;Devos et al, 2021;Feng et al, 2022). (Cornell and Shapiro, 1987;Horsky and Swyngedouw, 1987;Song, 1991;Cooper et al, 2001;Delattre, 2002;Oh and Hyun, 2003;Oh, 2004;Karim, 2011;Park and Kim, 2012;Green and Jame, 2013;Agnihotri and Bhattacharya, 2017;Zhao et al, 2018;Park, 2019;Park andPark, 2019a, 2019b;Park et al, 2022). (Park and Kim, 2012;Karim, 2011;Agnihotri and Bhattacharya, 2017;Park andPark, 2019a, 2019b;Park, 2019;Park et al, 2022a (Zhao et al, 2018;Jain and Jain, 2019;Akyildirim et al, 2020;Sharma et al, 2020;Chen et al, 2022;Wu and Chen, 2022).…”