Abstract

http://ssrn.com/abstract=1936187
 
 

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The Persistence of Long-Run Abnormal Stock Returns: Evidence from Stock Repurchases and Offerings


Fangjian Fu


Singapore Management University - Lee Kong Chian School of Business

Sheng Huang


Singapore Management University - Lee Kong Chian School of Business

Hu Lin


Peking University

December 4, 2012


Abstract:     
Prior studies show that stock returns are abnormally high in the years following share repurchases and low following seasoned equity offerings. While long-run abnormal returns are confirmed for both events announced as of 2002, we do not find significant abnormal returns for either event after 2002. The disappearance of abnormal performance is consistent with the improved market efficiency in recent years, accompanied by reduced trading costs and increased institutional investment activities. Echoing the improved market efficiency, fewer firms in the recent years conduct stock repurchases or offerings for the market-timing purpose. Our findings call for a dynamic view on market efficiency and its implications on firm and investor behavior.

Keywords: Long-run abnormal returns, market efficiency, stock repurchases, seasoned equity offerings

JEL Classification: G14, G12, G35, G32

working papers series


Not Available For Download

Date posted: September 30, 2011 ; Last revised: November 13, 2013

Suggested Citation

Fu, Fangjian and Huang, Sheng and Lin, Hu, The Persistence of Long-Run Abnormal Stock Returns: Evidence from Stock Repurchases and Offerings (December 4, 2012). Available at SSRN: http://ssrn.com/abstract=1936187 or http://dx.doi.org/10.2139/ssrn.1936187

Contact Information

Fangjian Fu (Contact Author)
Singapore Management University - Lee Kong Chian School of Business ( email )
50 Stamford Road
Singapore, 178899
Singapore

Sheng Huang
Singapore Management University - Lee Kong Chian School of Business ( email )
50 Stamford Road
Lee Kong Chian School of Business
Singapore, 178899
Singapore
(65) 6828 0252 (Phone)
(65) 6828 0247 (Fax)

Hu Lin
Peking University ( email )
Beijing, 100871
China
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