Market Reaction to Actual Daily Share Repurchases in Greece

Angeliki Drousia, Athanasios Episcopos and George Leledakis

MPRA Paper from University Library of Munich, Germany

Abstract: The stock market reaction around the announcement date of actual share repurchases, the factors that affect the size of that reaction, and the motives behind share acquisitions are examined. A unique, hand-collected dataset is used, including public announcements of companies traded on the Athens Stock Exchange. Consistent with the price support hypothesis, companies repurchase when their share price exhibits a declining trend, whereas the short-term market reaction is not statistically significant. Large firms and firms with low book-to-market ratio repurchase when their stock has underperformed the market. Small firms and firms with high book-to-market ratio repurchase even though their shares have not experienced abnormal declines. The market reacts more favorably to buybacks by small firms and firms with high book-to-market ratio. Long-term abnormal returns are higher for repurchasing firms compared to non-repurchasing controls, and depend positively on the frequency of repurchases and the stated reason for program authorization.

Keywords: Actual share repurchases; market reaction; firm characteristics; stated repurchase reasons; price support hypothesis (search for similar items in EconPapers)
JEL-codes: G14 G15 G35 (search for similar items in EconPapers)
Date: 2016-10-01, Revised 2017-08-01
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https://mpra.ub.uni-muenchen.de/83039/1/MPRA_paper_83039.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/91765/8/MPRA_paper_91765.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/93204/1/MPRA_paper_93204.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/93185/8/MPRA_paper_91765.pdf revised version (application/pdf)

Related works:
Journal Article: Market reaction to actual daily share repurchases in Greece (2019)
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