he impact of corporate label change on shareholder reaction: Evidence from South Korean firms

This study probes the impacts of corporate label change (CLC) on shareholder value. We try to address two research questions: (1) how shareholders respond when investing companies change their corporate label; and (2) what are the factors of firm heterogeneities deviate shareholder reactions? The findings from South Korean companies reveal that corporate label change itself does not significantly affect shareholder value. However, two firm-level heterogeneities—size and prior CLC experience—show inverted U-shaped relationships with the shareholder reactions. Furthermore, the negative and significant interaction between the firm size and prior CLC experience illustrate more dynamic contingencies of how shareholder react depending on the two conditions. Key academic and practical implications are highlighted.