Announcements Effect of Corporate Name Change: Failed vs Non-Failed Firms

Abstract

The corporate name is the identity and pride of a corporate entity. A name change is an important and done only if the benefits out weights the costs. This study attempts to investigate corporate name change has a wealth effect on the company’s shareholders. It investigates effects of name change announcement concurrent with announcements of reorganisation 1g of the firm. Event study methodology was employed to examine the above issues to failed and non-failed firms for the period from 1980 to 1996. A positive share was observed with respect to the announcements of name change of failed firms the reorganisation and restructuring. Share prices start reacting at least three days sanouncement day, with significant positive abnormal returns on the day of announcement returns in the post announcement period. However, there is no wealth effect observed = ments of name change of non-failed firms.