Shareholder Wealth Effects and Corporate Name Change: Evidence from Malaysia

Corporate Ownership & Control, Vol. 2, No. 1, pp. 38-49

Posted: 2 Dec 2004

See all articles by Yusuf Karbhari

Yusuf Karbhari

Cardiff Business School

Zulkarnain Muhamad Sori

INCEIF, The Global University of Islamic Finance

Shamsher Mohamad

University Putra Malaysia - Graduate School of Management

Multiple version iconThere are 2 versions of this paper

Abstract

This study seeks to evaluate the shareholder wealth effect of corporate name change by Malaysian listed companies. Our sample comprises both failed and non-failed Malaysian companies and standard event study methodology is employed. Our results indicate that corporate name changes have no impact on shareholder wealth unless the announcement is accompanied with news of approved corporate restructuring by Malaysian regulatory authorities. In addition, extraordinary abnormal returns were found on the announcement day for the failed companies group whilst, the sub-sample of non-failed companies experienced a significant low negative abnormal return around the announcement date indicating disapproval of cosmetic name changes. Investors in Malaysia are generally cautious about receiving news of a corporate name change. The study also suggests that the market cannot be fooled by mere name change, such a change must be backed by serious efforts towards recovery.

Keywords: Corporate Name Change, Event Study, Failed Firms, KLSE, Malaysia, Restructuring, Wealth Effects

JEL Classification: M41

Suggested Citation

Karbhari, Yusuf and Muhamad Sori, Zulkarnain and Mohamad, Shamsher, Shareholder Wealth Effects and Corporate Name Change: Evidence from Malaysia. Corporate Ownership & Control, Vol. 2, No. 1, pp. 38-49. Available at SSRN: https://ssrn.com/abstract=626403

Yusuf Karbhari (Contact Author)

Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF1 3EU
United Kingdom
+ 44 0 29 2087 6057 (Phone)
+ 44 0 29 2087 4419 (Fax)

Zulkarnain Muhamad Sori

INCEIF, The Global University of Islamic Finance ( email )

Lorong Universiti A
Kuala Lumpur, Kuala Lumpur 59100
Malaysia
+60376514173 (Phone)
8 (Fax)

HOME PAGE: http://www.inceif.org/

Shamsher Mohamad

University Putra Malaysia - Graduate School of Management ( email )

Selangor Darul Ehsan
Serdang, Selangor 43400
Malaysia

Register to save articles to
your library

Register

Paper statistics

Abstract Views
660
PlumX Metrics