Corporate Renaming and Stock Price Crash Risk

ABSTRACT This study investigates the impact of corporate renaming on future stock price crash risk. We find a positive correlation between corporate name changes and crash risk, facilitated through two channels: diverted investor attention and increased information asymmetry. Cross‐sectional analyses show that frequent, non‐radical, or proactive name changes increase crash risk. This association is more pronounced in poorly governed firms, and enhanced external monitoring could mitigate the positive association between renaming and crash risk. Additional evidence suggests that overseas experience or high reputation concern of the CEOs mitigates this risk, while firms experiencing weak performance are associated with higher crash risks.