An Empirical Study On The Influences Of The Stock Name Changes On Chinese Stock Market

In recent years,there arises a phenomenon that a lot of listed companies change their stock names in Chinese stock market.According to classic financial theories,besides stock name changes caused by main business change and asset restructuring,stock name change,a kind of “non-event”,which does not include any useful information about investment,should not have any impact on the stock price.However,based on researches,in reality,it is not the same as imagined.For example,during the period of stock name changes,the stock prices will undergo an obvious fluctuation.The purpose of this article is to use the event analysis method and regression analysis method to find out the short-term and long-term market effects caused by stock name changes from a perspective of empirical analysis.This article sets all the listed companies which have released the positive stock name change notices during 2012 and 2017 as the objects of study.Based on the notices released by these companies,this article categorizes all the objects according to different reasons for name change.It mainly studies the short-term market effects and long-term company value caused by stock name changes by listed companies and tries to quote the investor sentiment and investor concern models to analyze the influencing factors based on behavioral finance.After empirical study,the following conclusions have been arrived.First,there is an obvious positive cumulative abnormal return during the period-1 to 0 of stock name changes.Besides,the information that stock name will be changed has been disclosed before the release,therefore influencing the stock market.It shows that the stock market overly reacts to the stock name changes and the Chinese stock market is not effective.Second,the material name changes and the immaterial name changes have sharply different influences on the stock market.The market reacts more violently to the material name changes.Third,the degree of name change has great positive impact on the short-term market reaction and the investor sentiment and investor concern also have great impact on the reaction.But the proportion of top 10 share holders has little impact on the market reaction.Fourth,from long perspective,investors have better expectations about the companies during the release of the notices.Besides,the market also takes a more positive attitude towards the companies who change their stock names and give higher valuations.The article also finds out that the companies who change their stock names are overvalued.In other words,stock name changes have great impacts on improving the long-term valuations of the companies.