An analysis of stock repurchase in Taiwan

Li-Hsun Wang, Chu-Hsiung Lin, Hung-Gay Fung and Hsien-Ming Chen

International Review of Economics & Finance, 2013, vol. 27, issue C, 497-513

Abstract: We show that the specific regulation in Taiwan requiring firms to repurchase shares explicitly to resolve the information ambiguity does not prevent market underreaction by the evidences of positive short-term and long-term abnormal return. In addition, firms that retire their buybacks show a superior long-term performance than those that reissue the buybacks. Our results show that the long-term price performance is positively related to firms' operating performance and dividend payouts in the post-repurchase period. Further analysis indicates that the market reacts asymmetrically to the changes of firms' operating performance and dividend payout level.

Keywords: Long-term price performance; Retired shares; Stock repurchases (search for similar items in EconPapers)
JEL-codes: G14 G30 G32 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:27:y:2013:i:c:p:497-513

DOI: 10.1016/j.iref.2013.01.007

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