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The determinants of share repurchases in Europe

Dimitris Andriosopoulos () and Hafiz Hoque

International Review of Financial Analysis, 2013, vol. 27, issue C, 65-76

Abstract: In this paper, we assess which firm-characteristics are associated with a firm's decision to announce a share repurchase programme in a cross-country framework. In the models, we incorporate firm-specific financial characteristics and measures of share price performance. We find that size, cash dividends, and ownership concentration consistently have a significant impact on share repurchase announcements in all three countries under study. However, the share price performance does not explain the decision to announce a share repurchase. The robustness of the proposed models is investigated across different dimensions of sample-matching methods and with a boot-strap technique. Finally, we construct a number of models with a robust predictive ability of a firm's likelihood to announce a share repurchase.

Keywords: Share repurchases; Determinants; Information asymmetry; Logit model; Boot-strap (search for similar items in EconPapers)
JEL-codes: G14 G32 G34 G35 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1016/j.irfa.2012.12.003

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