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Name complexity, cognitive fluency, and asset prices
Author(s) -
Fang Chenjun,
Zhu Ning
Publication year - 2019
Publication title -
review of financial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.347
H-Index - 41
eISSN - 1873-5924
pISSN - 1058-3300
DOI - 10.1002/rfe.1050
Subject(s) - fluency , stock (firearms) , witness , economics , asset (computer security) , business , financial economics , information asymmetry , capital asset pricing model , monetary economics , investor behavior , stock exchange , finance , psychology , computer science , mechanical engineering , paleontology , mathematics education , computer security , test (biology) , engineering , biology , programming language
We document three interesting phenomena in the Chinese stock market related to the complexity of stock tickers: Companies with more complex stock tickers are (1) held by fewer investors; (2) witness a lower turnover; and (3) experience lower returns during post‐IPO period. The change‐in‐change analysis based on ticker‐changing events generates consistent results. Such results are strong among companies with a higher level of individual investor ownership and stronger information asymmetry. Our findings confirm and extend Green and Jame ( Journal of Financial Economics , 2013, 109:813–834) and support that cognitive fluency and name recognition influence investor behavior and asset prices.