| dc.description.abstract | Every year, many firms change their names. In the finance industry, corporate name change is also a common practice. While many corporate name changes are associated with business restructuring initiatives, some of them are unrelated to corporate activities and are rather motivated by the evolving competition environment and the recent popularity of FinTech. This paper examines the rationales behind the name changes in the financial industry and the market's reaction towards them. After studying 309 name changes of public U.S. financial companies during the 2000-2018 period that are unrelated to the firm's restructuring events, I conclude that there are five types of name changes: signaling, rebranding, window-dressing, misalignment, and minor name changes. Further, different types of name change have different valuation effects on the company. Overall, there is a permanent increase in stock prices by the announcement date for name changes in the financial industry. Specifically, signaling name changes, rebranding name changes, and minor name changes that are associated with corporate entity changes have positive valuation effects on the companies. In contrast, the market reaction to the window-dressing name changes and misalignment name changes are transitory and negative in the long run. Although no evidence in my study indicates any clear name change pattern associated with FinTech, my study of the window-dressing name changes of Future Fintech Group Inc and Long Blockchain Corp indicates that the valuation effects are likely transitory in nature. | |
