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Asian Review of Financial Research, Vol., No..
pp.1763~1786
pp.1763~1786
Revealing the Family Name: Valuation Effects of Name Changes for Chaebol-Affiliated Firms
Suk Joon Byun KAIST College of Business, 85 Heogiro, Dongdaemoon-gu, Seoul 130-722, Korea
Da Hea Kim KAIST College of Business, 85 Heogiro, Dongdaemoon-gu, Seoul 130-722, Korea
Sang Hyun Yun KAIST College of Business, 85 Heogiro, Dongdaemoon-gu, Seoul 130-722, Korea
We examine the stock market reaction to announcements of corporate name changes for firms belonging to Korean chaebols. We find that chaebol-affiliated firms changing their non-chaebol-name (a name not including the name of a chaebol) to a chaebol-name (a name including the name of a chaebol) experience a positive stock price reaction on the announcement date. Another noteworthy finding is that the firms also earn a statistically significant excess return on the effective date of a name change, as well as on the announcement date. The stock price reaction on the effective date is stronger among stocks experiencing a larger increase in their investor base.
Suk Joon Byun
Da Hea Kim
Sang Hyun Yun
We examine the stock market reaction to announcements of corporate name changes for firms belonging to Korean chaebols. We find that chaebol-affiliated firms changing their non-chaebol-name (a name not including the name of a chaebol) to a chaebol-name (a name including the name of a chaebol) experience a positive stock price reaction on the announcement date. Another noteworthy finding is that the firms also earn a statistically significant excess return on the effective date of a name change, as well as on the announcement date. The stock price reaction on the effective date is stronger among stocks experiencing a larger increase in their investor base.
Name changes,Valuation effects,Inefficient markets,Investor recognition hy-pothesis,Chaebol
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