The Valuation Effect of Corporate Name Changes: A 30-Year Perspective

This dissertation examines the valuation effect of name changes over 30 years from 1978 to 2008. Using a standard event study methodology, I find that companies that change their names earn significant abnormal returns of 1.41% for the three days around the name change announcement date and 3.58% for the whole period from day t- 60 to day t 40. The post-announcement reversal is only modest and stopped at around day 40. Univariate analysis shows that major name changes, smaller firm name changes, manufacturing and service firm name changes, and younger firm name changes have stronger valuation effects for the three days around the announcement date. Multivariate regression analysis shows that the act of a name change is actually an act of signaling.