G41 - Behavioral Finance: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial MarketsReturn

We provide systematic evidence of the effect of alphabetical sorting on corporate performance based on over a decade of data covering seventeen EU countries in three European language families. We also measure the effects of using English words in a corporate name in a non-English-speaking country, of a corporate name containing a 'national' (patriotic) word, and of simple linguistic properties highlighted in the brand-name marketing literature. Using multiple measures of corporate performance, we find companies sorted low in the alphabet to be less successful in several European countries, particularly in services. 'National' words are associated with substantially higher sales growth in, e.g., Poland, Norway, France and Spain, while the use of English words in company names curbs (fosters) sales growth in Romance- (Slavic-) language countries.