Company Name Fluency, Investor Recognition, and Firm Value
T. Clifton Green
Emory University - Goizueta Business School
Russell E. Jame
University of New South Wales; Financial Research Network (FIRN)
October 30, 2012
We find companies with short, easy to pronounce names have higher breadth of ownership, greater share turnover, and lower transaction price impacts. The relation is stronger among small firms and is consistent with name fluency affecting investor recognition. Fluent company names also translate into higher valuations as measured by Tobin's Q and market-to-book. Corporate name changes increase fluency on average, and fluency improving name changes are associated with increases in breadth of ownership, liquidity, and firm value. Name fluency also affects other investment decisions, with fluently named closed-end funds trading at smaller discounts and fluent mutual funds attracting greater fund flows.
Number of Pages in PDF File: 59
Keywords: Investor Recognitionworking papers series
Date posted: March 7, 2011 ; Last revised: October 31, 2012
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