EU regulation and open market share repurchases: New evidence

Angeliki Drousia, Athanasios Episcopos, George Leledakis and Emmanuil Pyrgiotakis

MPRA Paper from University Library of Munich, Germany

Abstract: This paper re-examines the impact of the EU Market Abuse Directive (MAD) on the market reaction around share repurchase announcements. We use a unique hand-collected dataset of firms listed on the Athens Stock Exchange, and we find evidence that contrasts with previous conclusions for large European economies. The implementation of the MAD is followed by a significant increase in announcement abnormal returns, which is more pronounced in initial repurchase programs. Our results remain robust to a series of robustness tests. We attribute our findings to cross-country differences in institutional framework and pre-MAD existing national laws. Collectively, our results support the notion that EU directives do not have a uniform effect across Member States. Thus, the impact of such reforms should also be examined in individual capital market studies.

Keywords: Share repurchases; Market Abuse Directive; safe harbor; signaling undervaluation. (search for similar items in EconPapers)
JEL-codes: G14 G15 G35 G38 (search for similar items in EconPapers)
Date: 2020-06-01, Revised 2021-01-31
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https://mpra.ub.uni-muenchen.de/105683/1/MPRA_paper_105683.pdf original version (application/pdf)

Related works:
Working Paper: EU regulation and open market share repurchases: New evidence (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:105683

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