Does a stock’s name affect its abnormal return? Evidence from different scenarios

ABSTRACT

This study investigates the impact of a stock’s name on its abnormal return in not only the name change scenario but also a less-disturbed scenario: the IPO scenario. After measuring the characteristics of a stock’s name with informativeness, fluency and luckiness, the results show that a stock’s name does impact its abnormal return in both scenarios. And compared to the name change scenario, this impact is more evident in the IPO scenario. Furthermore, the impact of a stock’s name varies in different Chinese markets as the levels of investor knowledge and experience differ in these markets. The fluency and luckiness of a stock’s name have significantly positive impacts on its abnormal return in the main board, while only informativeness affects the abnormal return significantly in the growth enterprise market.

KEYWORDS:

• Stock name
• abnormal return
• IPO
• stock name change

JEL CLASSIFICATION:

• G41
• G10

Disclosure statement

No potential conflict of interest was reported by the author(s).

Supplementary material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/13504851.2024.2333452

Additional information

Funding

This work was supported by the 2022 Open Topics of Institute of Digital Finance, Hangzhou City University under Grant No.12.