Company Name Fluency, Investor Recognition, and Firm Value

59 Pages Posted: 7 Mar 2011 Last revised: 16 Nov 2017

See all articles by T. Clifton Green

T. Clifton Green

Emory University - Department of Finance

Russell Jame

University of Kentucky - Gatton College of Business and Economics

Date Written: October 30, 2012

Abstract

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.

Keywords: Investor Recognition

Suggested Citation

Green, T. Clifton and Jame, Russell, Company Name Fluency, Investor Recognition, and Firm Value (October 30, 2012). Journal of Financial Economics (JFE), No. 109, 2013, Available at SSRN: https://ssrn.com/abstract=1777256 or http://dx.doi.org/10.2139/ssrn.1777256

T. Clifton Green (Contact Author)

Emory University - Department of Finance ( email )

1300 Clifton Rd.
Atlanta, GA 30322-2710
United States
404-727-5167 (Phone)
404-727-5238 (Fax)

Russell Jame

University of Kentucky - Gatton College of Business and Economics ( email )

550 South Limestone
Lexington, KY 40506
United States

HOME PAGE: http://russelljame.com

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