The Wealth Effects of Oil-Related Name Changes on Stock Prices: Evidence from the U.S. and Canadian Stock Markets

Abstract

This paper examines the valuation effects of corporate name changes involved oil related terms during recent oil price surges. Using data from the U.S. and Canadian stock markets, we show that there is a tendency for companies in both markets to add oil or petroleum to their corporate names when oil prices are high. Results show that U.S. investors react more positively for firms that add oil-related terms to their names. Name changes trigger short-term positive and long-term negative returns in the Canadian market. Our results add supports of the literature that investors are potentially influenced by corporate name changes associated with market wide sentiments.

Keywords: corporate name change, oil price, event study

JEL Classification: F31, F33, G14, G15