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Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 53, No. 2, pp.385-428
ISSN: 1226-1874 (Print)
Print publication date 30 Apr 2024
Received 14 Jul 2023 Revised 02 Feb 2024 Accepted 16 Feb 2024
DOI: https://doi.org/10.17287/kmr.2024.53.2.385

한국 IT기업의 상호변경의 전략적 효과: 상장폐지위기 여부를 중심으로

Jung-Mi Park
(First Author) Business and Economic Research institute, Department of Business Administration, Wonkwang University mafi2050@wku.ac.kr
Strategic Effects of Corporate Name Changes in Korean IT Firms: Focusing on Whether There is a Delisting Crisis or Not


Copyright 2024 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This study analyzes the impact of market reactions to corporate name change strategies on firm value and value sustainability. It also analyzes whether there are differences in the relationship between market reactions and firm value and value sustainability depending on whether the firm can remain listed after the name change.

This study first presents the empirical findings and implications of this study as follows: First, there is a positive relationship between market reactions to corporate name change strategies and firm value. And the effect (value persistence) persists over a while. Second, this effect is particularly valid for listed firms. For firms that can remain listed, the market reaction to a name change is significantly and positively related to firm value in the following year, and the effect is persistent over time. For firms in danger of delisting, the relationship is positive when analyzed on a three-year average. These findings suggest that the long-term effect of corporate name changes can positively affect firm value if the market reaction is positive, not only for firms that can continue to be listed but also for firms that are in danger of delisting, which implies that corporate name changes can have different effects on firm value depending on how they are strategically organized.

Keywords:

Corporate Name Changes, Market Responses, Firm Value, Sustainability, IT firms

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∙ The author Jung-Mi Park is currently a lecture professor in the Department of Business Administration, Wonkwang University. She received her master's and doctoral degrees from Wonkwang University, majoring in financial management. Her main areas of interest are Corporate Finance, Management Strategy, and Firm Value.