The Effect Of Corporate Name Changes On Shareholder Wealth

Abstract

This paper analyzes in the Agency-Signaling context of Jensen and Meckling (1976) and Spence (1973) non-merger corporate name changes over 1983-1985. Using an event-study methodology, the results suggest that changes in corporate identities serve in some circumstances as signals to the market of increased operational efficiencies, enhanced investment opportunities and the acquisition of superior managerial ability. The form and frequency of the name change however, was found generally to be insignificant.