Corporate name change and shareholder wealth effect: Empirical evidence in the French Stock Market

Bicha Karim
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Bicha Karim: 09, Rue du Golfe - Route de la Plage

Journal of Asset Management, 2011, vol. 12, issue 3, No 5, 203-213

Abstract: Abstract This article focuses on the shareholder wealth effect of corporate name changes. Using an event study methodology, we tried to analyse the market reaction following 83 announcements made during the 2004–2007 period by firms listed in ‘ Euronext Paris’. The results show globally a positive impact on stock prices during the event window and in consequence on shareholder wealth. The market reacted, in fact, positively at the announcement day and firm's average market value continued to increase during the post-event period reflecting the economic potential of the operation. Therefore, our findings support ‘The shareholder value maximisation hypothesis’ (Woolridje and Snow) about strategic decision value effect, as the corporate name changes seem to be profitable for shareholders.

Keywords: corporate name change; shareholder wealth; firm value; events studies (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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DOI: 10.1057/jam.2011.9

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