Does prior record matter in the wealth effect of open-market share repurchase announcements?

Shao Chi Chang, Sheng Syan Chen, Li Yu Chen

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

This study investigates whether prior experience of share repurchases matters in the market reactions to the subsequent repurchase announcements. Specifically, we study the prior record on actual buybacks and post-announcement stock performance. We find that upon the announcement of share repurchases, stock markets not only respond more positively to those made by firms that have better record on actual buyback following their previous repurchase plan announcements, but also experience a stronger reaction for announcing firms with better stock performance after prior repurchase announcements. These results hold even after controlling for other variables that are found important in influencing the market reactions to repurchase announcements.

Original languageEnglish
Pages (from-to)427-435
Number of pages9
JournalInternational Review of Economics and Finance
Volume19
Issue number3
DOIs
Publication statusPublished - 2010 Jun 1

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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