Share repurchase and capital market pricing efficiency

He Ren, Linlin Ye and Shi Zheng

Finance Research Letters, 2024, vol. 60, issue C

Abstract: Share repurchase has become essential to distribute dividends, optimize long-term incentive mechanisms and improve governance structure. This paper selects the sample data from 2007 to 2021 to investigate stock repurchase in promoting the pricing efficiency. Stock repurchase can reduce the synchronicity. The mechanism test points out that stock repurchase plays an inhibitory role by improving stock liquidity and the quality of information disclosure. The heterogeneity test shows that the mechanisms are significant in state-owned enterprises and enterprises with low internal and external governance efficiency due to the substitution effect of stock repurchase on governance to a certain extent.

Keywords: Share repurchase; Capital market pricing efficiency; Synchronicity (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:60:y:2024:i:c:s154461232301276x

DOI: 10.1016/j.frl.2023.104904

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