The wealth effects of oil-related name changes on stock prices: Evidence from the U.S. and Canadian stock markets

Hsiao-Mei Lin, Fok, Robert (Chi-Wing), Shih-An Yang and Yuanchen Chang

Journal of International Financial Markets, Institutions and Money, 2016, vol. 40, issue C, 26-45

Abstract: This paper examines the valuation effects of corporate name changes involving oil-related terms in the U.S. and Canadian stock markets. We show that relatively more U.S. companies add oil-related terms to their corporate names compared to Canadian firms. Investors in the U.S. market react more positively towards firms experiencing oil-related name changes during the recent oil price surge. On the other hand, the results indicate that the oil-related name change effects appear to be transitory in the Canadian market. Name changes trigger positive returns surrounding the announcement day, but the negative post-event drift largely cancels the effect. Moreover, investor reactions to oil-related name changes are associated with the company's actual involvement in the oil industry.

Keywords: Corporate name change; Oil price; Event study (search for similar items in EconPapers)
JEL-codes: F31 F33 G14 G15 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:40:y:2016:i:c:p:26-45

DOI: 10.1016/j.intfin.2015.07.003

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