What’s in a name? Eponymous firms and innovation activity

Liangyin Chen and Jun Huang

Applied Economics, 2025, vol. 57, issue 10, 1145-1161

Abstract: In this paper, we examine the impact of eponymy (i.e. naming a firm after its owner) on the innovation activity of firms. We report that eponymous firms generally have a lower level of innovation, specifically, fewer patents. After classifying total patents into invention patents, utility model patents, and design patents, we find that the reduced innovation levels of eponymous firms are predominantly evident in the decreased numbers of invention patents and utility model patents. Our findings are robust after employing alternative measures of innovation, propensity score matching, and alternative regression methods. After employing a difference-in-differences model to address concerns of endogeneity, our baseline result remains reliable. Further analysis shows that the effect of eponymy on firm innovation is weaker in high-tech firms and firms with more educated owners. Conversely, the effect of eponymy on firm innovation is stronger in firms with greater analyst coverage. Economic consequence test result indicates that the inhibitory effect of eponymy on firm innovation reduces the total factor productivity of firms. Our study enriches the literature on eponymous firms and firm innovation and explains the logic underlying the relationship between firm name and innovation activities.

Date: 2025
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DOI: 10.1080/00036846.2025.2449855

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