Does “Resetting” by Changing Corporate Name or Industry Category Appeals to Institutional Investments?

  • Paoyu Huang Soochow University
  • Yensen Ni Tamkang University
  • Yirung Cheng Tamkang University
Keywords: Corporate Name Change, Industry Category Change, Board Structure, Financial Ratio, Firm Value

Abstract

We investigate whether firms changing their names or industry categories once and more than once would affect institutional shareholdings. By utilizing 5,733 observations of the Taiwan Stock Exchange listed firms, we apply multiple regression models firstly and Petersen regression models for further investigation to enhance the robustness of the empirical results. We then disclose several important findings as follows. First, institutional investors might not prefer holding the shares of the firms changing their names more than once. We infer that the performances of the firms changing names more than once might be doubtful. Second, institutional investors might decrease the shareholdings of the firms with industry categories changed. We claim that institutional investors might suspect these firms probably existing corporate governance issues. Besides, we argue that, to our best understanding, this study might fill the gap in the existing literature due to that the issues, firms changing their names or industry categories once or more than once, seem rarely explored in the relevant studies.

Author Biographies

Paoyu Huang, Soochow University
Dr. Paoyu Huang (Corresponding author) is a Professor in the Department of International Business, Soochow University, Taiwan. She received the Ph.D. degree in the Department of Management Science, Tamkang University, Taiwan. Her research interests lie in issues relating to corporate governance, capital market, microstructure, and technical analysis.
Yensen Ni, Tamkang University
Dr. Yensen Ni is a Professor in the Department of Management Science, Tamkang University, Taiwan. He received the Ph.D. degree in the Department of Economics, University of Illinois at Chicago. His research interests include corporate governance, capital market, and microstructure, and technical analysis.
Yirung Cheng, Tamkang University
Dr. Yirung Cheng is a Ph.D. of the Department of Management Sciences at Tamkang University, his research interests include corporate governance, capital market and technical analysis.
Published
2020-01-02
How to Cite
Huang, P., Ni, Y., & Cheng, Y. (2020). Does “Resetting” by Changing Corporate Name or Industry Category Appeals to Institutional Investments?. Contemporary Management Research, 15(3), 175-203. https://doi.org/10.7903/cmr.18885
Section
10: Other contemporary management issues