Organ donation is heading from a bogus reality show to the big screen: An A.P. article reports that Paris Hilton has landed a role in the movie Repo! The Genetic Opera, a so-called “horror rock” musical that’s “set in a plague-ravaged future where people can purchase new organs on the installment plan from a corporation called Geneco.” Hilton will play the “fame-seeking daughter of Geneco’s owner,” played by Paul Sorvino.
We’ve devoted plenty of time to discussing the effects of individual’s names, but what about the names of companies? De Montfort University finance professor Panagiotis Andrikopoulos has published a study on the “predictive power of corporate name changes on companies’ subsequent long-term stock market performance,” using a sample of 803 company name changes over 15 years. His results indicate that, on average, a name change is viewed as a sign that the company is in trouble (regardless of whether or not it actually is), and the stock price takes a subsequent hit. (Hat tip: John De Palma.)
In response to Levitt’s questioning of the current academic publishing system, reader L. Shane Carlson informed us of his new project, Pronetos.com, an online professor’s network that allows academics to publish papers, receive instant feedback, share podcasts of lectures, and, of course, blog.
9 Comments
What’s the effect of having a difficult-to-spell-or-pronounce name on professors’ frequency of citation or invitation to conferences?
— oddToddI agree, his name sounds like a disease.
— cthaylerlessee….
I’ve worked for 6 companies so far…
two had changed their names. While the companies are still in business both of the plants I worked at shut down due to lost business.
Yhe other four are either thriving or at least maintaining.
just my personal experience.
— discordianIf a company changes its own name, then the company considers itself in trouble already. A name change is expensive and they must thing the benefits will outweight the costs. Simply not being in financial trouble is not enought to run a publicly traded company. There are opportunity costs to consider. What should be a bigger indicator to investors is when a company changes its fiscal year end. This almost always indicates shady business.
— CDButlerYeah where are your letters with the goodies man
.lermit
— lermitLook at this about corporate name changes during the .com era:
http://www.blackwell-synergy.com/doi/abs/10.1111/0022-1082.00408
— dgObviously Dieter Zetsche thinks that a name is very important. In a letter regarding the new shift at DaimlerChrysler, he puts special emphasis on the new company name, Daimler.
He wrote:
• When our customers think of top-of-the-line vehicles, their first thought should be “Daimler.”
• When our competitors establish competitive benchmarks in the auto industry, they should have to measure themselves in terms of Daimler.
• When an investor looks to buy shares in an automaker, he should never overlook Daimler.
• When political or social decision-makers are looking for industrial partners that take their long-term social and ecological responsibilities seriously, the name “Daimler” should immediately
come to mind.
The full letter was posted by The Detroit News here: http://info.detnews.com/pix/2007/PDF/lettertoemployees.pdf
— JHOne other situation where a company changes its name is after a merger, as simply compounding the names of the parent companies may give a rather unwieldy result. e.g. when British Steel merged with dutch steelmaker Koninklijke Hoogovens, the merged company quickly changed its name to Corus and when Rhône-Poulenc merged with Hoechst the new company was named Aventis.
— Brett Dunbarthe same phenomenon might hold for humans- women that keep their name may be more successful than those that ‘merge’ (although the jettison of Rodham might buck this trend)
— frankenduf