Surfing the green wave: What's in a "green" name change?

Carmelo Latino

No 410, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: This paper investigates stock market reaction to greenwashing by analyzing a new channel whereby companies change their names to green-related ones (i.e., names that evoke green and sustainable sentiments) to persuade the public that their activities are green. The findings reveal a striking positive stock price reaction to the announcement of corporate name changes to green-related names only for companies not involved in green activities at the time of the announcement. However, over an extended period of time, companies unrelated to green activities experience substantial negative abnormal returns if they fail to align their operational focus with the new name after the change.

Keywords: Corporate Social Responsibility; Sustainable Investments; Greenwashing; Corporate Name Change (search for similar items in EconPapers)
JEL-codes: G11 G24 M14 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:280965

DOI: 10.2139/ssrn.4670504

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