Actual Share Repurchase and Corporate Liquidity
Université Paris Dauphine - CEREG
EFMA 2004 Basel Meetings Paper
Research into the impact of open market share repurchases has been hindered by the lack of data available on actual share repurchases in many countries, including the U.S. Using a previously unaccessed database containing detailed information on 36,848 repurchase days concerning 352 French firms, we show that corporate share repurchases have a significantly adverse effect on the liquidity of the trading day concerned, whether measured by bid-ask spread or depth. Our results also indicate that although on average managers have some timing ability, only the smallest firms listed on the least liquid market segments successfully take advantage of it.
Number of Pages in PDF File: 39
Keywords: Open market share repurchases, liquidity
JEL Classification: G14, G32, G35working papers series
Date posted: May 12, 2004
© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo7 in 0.204 seconds