The Impact of Firm Names on Public Perception and Performance
By Grady Raines, PhD ’26
Tacos from Jesus
While walking the streets of a Central or Latin American country, you may notice something unique about the businesses operating there: Many businesses have religious names. For example, you often encounter businesses that claim to be “from God,’’ Such as the “Farmacia de dios” or even “Tacos de dios.” There are countless examples of firm names that include a religious reference throughout Latin America—but why would firms pick these names? Why don’t we see similar names in the United States? And how could they impact a firm’s performance?
Understanding the impact of firm names
My research project, “When Symbols Matter: Uncertainty, Local Logics and Firm Performance in Mexico,” attempts to investigate the impact of these kinds of firm names. It is a joint work with Peter Polhill, a master’s student in sociology at Brigham Young University (my undergraduate alma mater); Ryan Coles, assistant professor at the University of Connecticut; Shon Hiatt, associate professor at the University of Southern California; and Wesley Sine, professor of management and organizations at the Samuel Curtis Johnson Graduate School of Management. Many other researchers have attempted to understand the impact of firm names on performance, but the results are mixed. Some studies have found that names associated with family help firms because customers associate family with the idea that the entrepreneur is committed to the firm and will work harder to protect their reputation. In contrast, other studies have found that family names make audiences look less favorably on firms, because a family firm name seems out of place. For example, we don’t see many technology firms named for their owners.
Connecting a firm name with local culture
Our study tries to reconcile the contradictions of previous literature by paying close attention to local contexts. We think that local culture may have a big impact on how people perceive a business name—they may hold it in higher regard when it is aligned with their shared culture, or lower regard when misaligned. This phenomenon can be explained by foundational linguistic theory, which holds that the relationship between a word and its meaning is arbitrary. All meaning we glean from a word, including a business name, is imposed by society through association.
Thus, a potential customer will draw conclusions about a firm in the same way that a listener draws conclusions about a speaker based on their accent or word choice. The firm’s name functions not only as a way to refer to the business, but also as a set of social types, qualities, and attitudes that are associated with the firm name. The assumptions that audiences make about the quality of a firm will change depending on their understanding of the words that the firm uses in its name. So, when firms are picking their names, they should think carefully about their target demographic and try to make sure the symbols in their name will be understood and perceived positively by them.
Mexican Business Names
To explore our theory, we gathered data on all registered businesses in Mexico—an interesting case study, because in many parts of the country family and religion are particularly important culturally. In our statistical analysis, we found that firms that have religious or family names perform better than otherwise identical firms that don’t use these types of names. We also found that firms that are new in their respective market benefit more from religious and family names—possibly because when a firm is young, audiences don’t have a lot of information about them, so the associations derived from the name matter more. Most interestingly, and consistent with our theory, we find that when the area where a firm is located has a large shock of violence, religious and family names are increasingly positively correlated with performance.
We plan to use the generous funding from the Emerging Markets Institute to continue our research on firm names in Mexico. We will use the funding to continue gathering quantitative and qualitative data, present at conferences, and prepare our research to be submitted to an academic journal.
About Grady Raines, PhD ’26
Grady Raines is a second-year PhD student in the Management and Organizations group at Cornell University’s Samuel Curtis Johnson Graduate School of Management. His research uses quantitative methods to help explain how external institutional forces can impact entrepreneurship and the subsequent social impact (positive and negative). His current work explores these questions by studying 1) How patriarchy may limit the impact of deregulation for female entrepreneurs, 2) How environmental shocks shape the performance implications of firm names, and 3) How historical legacies of racism shape present-day organizational diversity practices.