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Shareholder wealth effects and corporate name change: Evidence from Malaysia

Karbhari, Yusuf, Sori, Zulkarnain Muhamad and Mohamad, Shamsher 2004. Shareholder wealth effects and corporate name change: Evidence from Malaysia. [Working Paper]. Working Paper Series, Social Science Research Network: Social Science Electronic Publishing. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id...

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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.

Item Type: Monograph (Working Paper)
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Subjects: H Social Sciences > HG Finance
H Social Sciences > HJ Public Finance
Uncontrolled Keywords: Corporate Name Change, Event Study, Failed Firms, KLSE, Malaysia, Restructuring, Wealth Effects
Publisher: Social Science Electronic Publishing
Last Modified: 04 Jun 2017 04:28
URI: http://orca.cf.ac.uk/id/eprint/39599

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