The information content of open-market repurchase announcements in Taiwan

Su-Yin Cheng and Han Hou

Journal of International Financial Markets, Institutions and Money, 2013, vol. 27, issue C, 59-75

Abstract: Utilizing information disclosures of open-market repurchases in Taiwan, this paper investigates two topics. The first is the association between corresponding announcing information and market responses. The results show that intention ratio is positively correlated with two-day announcement effect and the market responses of the entire execution period. However, the positive relationship is insignificant one month after the termination of the programs. The findings also reveal that price location is significantly negative when related to market responses of the overall execution period, and that such a relationship can last longer. Second, while proxy for undervaluation is properly considered, our findings suggest that the interaction between price location and market responses resulted from a higher premium rather than undervaluation, indicating that price location sends a signal of premium.

Keywords: Open-market repurchases; CARs; Announcement information; Premium; Event study (search for similar items in EconPapers)
JEL-codes: G10 G14 G32 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:27:y:2013:i:c:p:59-75

DOI: 10.1016/j.intfin.2013.07.010

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