Company name fluency and acquisition target analysis |
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| Authors: | Ching-Yu Hsu Chia-Wei Huang Chih-Yen Lin |
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| Affiliation: | 1. Department of Finance, College of Management, National Yunlin University of Science and Technology, Yunlin County, Taiwan;2. Department of Finance, College of Commerce, National Chengchi University, Taipei City, Taiwan;3. Department of Economics, College of Social Sciences, Fu Jen Catholic University, New Taipei City, Taiwan |
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| Abstract: | This paper investigates the impact of company name fluency on acquisitions. We hypothesize that a company's name fluency, used by potential acquirers as a mental shortcut, influences not only its visibility to investors but also the level of interest from potential acquirers, increasing the company's acquisition probability. After correcting for endogeneity, company name fluency is positively associated with both the probability of being an acquisition target and an acquisition premium. Reasons for a higher acquisition premium for targets with higher name fluency are identified as reduced need to hire top-tier investment banks and higher synergy. |
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| Keywords: | acquisitions company names fluency |
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