Market Reaction On Changes In Corporate's Name On The Indonesia Stock Exchange

Abstract

The market reaction on changes in corporate's name on the Indonesia Stock Exchange. This study tried to investigate empirically market reaction over the announcement of corporate name changes of companies on the Indonesia Stock Exchange. The market reaction is measured by using abnormal return with a single index model approach. The database of corporate name change announcements on the Indonesia Stock Exchange has obtained from an annual fact book report. The sample of this study consists of the companies that make a name change from 2005 to 2017. Hypothesis test uses one sample t-test. This research's result proves that there was a positive and significant market reaction to the corporate name change announcement. Moreover, This research’s result shows that there was a positive and significant reaction on the corporate name change announcement which is included on major change while at the corporate name change announcement which included on minor change there was no significant market reaction.

Investigating nexus between corporate re-branding and stock market performance: a study of Indian service sector

“…, 2018). With economic signaling perspective, Agnihotri and Bhattacharya (2017), Heriyanto and Candra Astra Terenggana (2019), Kalaignanamav and Bahadir (2013) find that announcement of strategic decisions like name change reduces the discrepancy between brand image and brand identity.…”

“…With rebranding announcements, firm signals MF 50,6 their stakeholders that something about the firm is going to change, may it be its values, strategies or the way it conducts the business (Kashmiri and Mahajan, 2015;Koku, 1997;Zhao et al, 2018). With economic signaling perspective, Agnihotri and Bhattacharya (2017), Heriyanto and Candra Astra Terenggana (2019), Kalaignanamav and Bahadir (2013) find that announcement of strategic decisions like name change reduces the discrepancy between brand image and brand identity.…”

“…According to Bosch and Hirschey (1989), the primary driver behind the company's decision to change its name was to provide a fresh image of the organization to stakeholders. According to Bosch and Hirschey (1989), a company may change its name in order to improve its business focus on a number of industry sectors, to represent improvements to its product line, alleviate market "confusion" over how it is perceived in comparison to rivals, to reveal a restructuring process, to adhere to diversification strategies, to shed an outdated reputation or for any number of other reasons (Heriyanto and Candra Astra Terenggana, 2019).…”

Reaksi Pasar atas Pergantian Nama Perusahaan yang Terdaftar di Bursa Efek Indonesia Tahun 2012–2022

“…Nama perusahaan dapat menjadi suatu identitas, kebanggaan, dan wadah pemersatu tujuan bagi seluruh pemangku kepentingan perusahaan. Selain berfungsi sebagai suatu identitas, nama perusahaan adalah komponen komunikasi perusahaan ke pasar dan juga dimanfaatkan sebagai alat strategis (Terenggana & Heriyanto, 2019). Seiring berjalannya waktu, tak sedikit perusahaan yang mengganti namanya dengan berbagai alasan.…”

“…Secara konseptual, pergantian nama dilakukan perusahaan dengan keyakinan bahwa keuntungan melebihi biaya yang dikeluarkan akan diperoleh perusahaan di masa mendatang dari kebijakan perubahan nama tersebut. Dengan pertimbangan ini, informasi tentang pergantian nama perusahaan dikatakan memiliki kandungan informasi positif (Terenggana & Heriyanto, 2019).…”