The effects of ownership and stock liquidity on the timing of repurchase transactions

Amedeo De Cesari, Susanne Espenlaub, Arif Khurshed and Michael Simkovic ()

Journal of Corporate Finance, 2012, vol. 18, issue 5, 1023-1050

Abstract: We analyze detailed monthly data on U.S. open market stock repurchases (OMRs) that recently became available following stricter disclosure requirements. We find evidence that OMRs are timed to benefit non-selling shareholders. We present evidence that the profits to companies from timing repurchases are significantly related to ownership structure. Institutional ownership reduces companies' opportunities to repurchase stock at bargain prices. At low levels, insider ownership increases timing profits and at high levels it reduces them. Stock liquidity increases profits from timing OMRs.

Keywords: Open market repurchase; Timing; Ownership; Liquidity (search for similar items in EconPapers)
JEL-codes: G3 G35 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:18:y:2012:i:5:p:1023-1050

DOI: 10.1016/j.jcorpfin.2012.06.004

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