Does a Share Name Change Have an Impact on the Pricing Efficiency of the Share?

This study examines the association between the pricing efficiency of individual shares during the post-period and the pre-period of renames, substantive renames, and those with non-substantive renames. Based on a sample of 567 firms in the Chinese A-share market, this study finds that the pricing e...

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Bibliographic Details
Published in:	SAGE open Vol. 13; no. 4
Main Authors:	Long, Yue’e, Su, Wunhong, Tan, Yufan
Format:	Journal Article
Language:	English
Published:	Los Angeles, CA SAGE Publications 01-10-2023 SAGE PUBLICATIONS, INC SAGE Publishing
Subjects:	propensity score matching R-squared renames pricing efficiency of individual shares renaming announcements
Online Access:	Get full text
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Summary:	This study examines the association between the pricing efficiency of individual shares during the post-period and the pre-period of renames, substantive renames, and those with non-substantive renames. Based on a sample of 567 firms in the Chinese A-share market, this study finds that the pricing efficiency of individual shares is significantly higher during the post-period than during the pre-period of a renaming announcement. Moreover, the results are robust to controls. In addition, the results are consistent with the argument that the firms experiencing substantive renames are more inclined to involve the firm-specific information content. JEL classification: M41, G32, G12, G34, M21 Plain Language Summary This research looked at how the renaming of companies affects how accurately their stock prices reflect true value in the Chinese A-share market. We studied 567 companies and found that after they announce a name change, their stock prices tend to show a more accurate value compared to before the announcement. This was especially true for companies that made significant changes to their names. This suggests that these name changes might be linked to better information about the companies being available to investors.
ISSN:	2158-2440 2158-2440
DOI:	10.1177/21582440231219071