Does company name matter? Evidence from Finnish stock market

Abstract

Multiple studies both from psychology and from finance suggest that investors in equity markets tend to favor fluent and familiar names when choosing companies to invest in. This study provides novel information on the role of company names in the Finnish stock market. Studying the data collected from the stocks listed in NASDAQ OMX Helsinki between 2010 and 2020, I find positive correlations between company name Finnishness, stock turnover and firm valuation. Cross-sectional panel regression shows that companies with more Finnish names have higher stock turnover and are traded at premiums in comparison to companies with not so Finnish names. The results show clear similarities to earlier research made elsewhere and further validates the results of previous studies. The results are significant and robust with alternative regressions too.