The wealth effects of oil-related name changes on stock prices: Evidence from the U.S. and Canadian stock markets

This paper examines the valuation effects of corporate name changes involving oil-related terms in the U.S. and Canadian stock markets. We show that relatively more U.S. companies add oil-related terms to their corporate names compared to Canadian firms. Investors in the U.S. market react more positively towards firms experiencing oil-related name changes during the recent oil price surge. On the other hand, the results indicate that the oil-related name change effects appear to be transitory in the Canadian market. Name changes trigger positive returns surrounding the announcement day, but the negative post-event drift largely cancels the effect. Moreover, investor reactions to oil-related name changes are associated with the company's actual involvement in the oil industry.