Shareholder Wealth Effects and Corporate Name Change: Evidence from Malaysia

Corporate name change and shareholder wealth effect: Empirical evidence in the French Stock Market

“…Some of them suggest that the announcement transmits good news (Horsky and Swyngedouw, 1987;Wan Kot and Zhang, 2007) especially when the change has a solid motivation (Bosch and Hirschey, 1989;Karbhari et al, 2004), and support, thus, 'The shareholder value maximisation hypothesis' (Woolridge and Snow, 1990). Other authors show that the announcement has no impact on stock prices (Howe, 1982;Karpoff and Rankine, 1994) or a negative effect ( Josev et al, 2004;Kadapakkam and Misra, 2007).…”

“…Karbhari et al (2004) divided their sample into two groups. They found a positive impact on returns of firms having financial distress and that have chosen to change their old name in a reorganization phase.…”

“…Karbhari et al (2004) explained that these firms did not publish a business plan or a report about their future perspectives jointly to the change operation, and so the market operators were not able to appreciate the real impact of the decision.…”

“…Second, it could provide this income after long periods. Third, and the most important characteristic, the income is associated to a high degree of uncertainty seeing the nature of this asset (Karbhari et al, 2004).…”

The name's the game: Does marketing impact the value of corporate name changes?

“…One wonders whether the benefits of these changes actually justify their costs. Surprisingly, some researchers (e.g., DeFanti & Busch, 2011) find a positive, some (e.g., Karbhari & Sori, 2004) highlight a negative, and others (e.g., Bosch & Hirschey, 1989) report no association between corporate name changes and shareholder value. Research that sheds light on these inconclusive results and explores the boundary conditions under which name changes increase shareholder value is limited on at least two fronts.…”