Ownership structure and open market stock repurchases in France

Edith Ginglinger and Jean-François L'Her

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Abstract: This paper examines open market stock repurchases in France. We find a positive averagemarket reaction to the repurchase announcement. However, the magnitude of the pricereaction is found to depend on a number of corporate governance structure measures. Thepositive aspects of the announcement only appear for a company with a low likelihood ofbeing taken over, and with a low risk of minority shareholder expropriation. Specifically,stock repurchase programs are good news when the firm is supported by foreign institutionalinvestors, and in the case of controlled firms, when the firm has a second large shareholder,which guarantees an effective balance of power for the controlling shareholders.

Keywords: open market share repurchases; undervaluation; ownership structure (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (21)

Published in European Journal of Finance, 2006, 12, pp.77-94

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00138292

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