Actual Share Repurchases, Timing and Corporate Liquidity
Université Paris Dauphine - CEREG
January 1, 2005
Journal of Banking and Finance, Vol. 31, No. 3, 2007
Research on 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 US. Using a previously unused database containing detailed information on 36,848 repurchases made by 352 French firms, we show that corporate share repurchases have a significant adverse effect on liquidity as measured by bid-ask spread or depth. Our results also indicate that share repurchases largely reflect contrarian trading rather than managerial timing ability.
Number of Pages in PDF File: 39
Keywords: open market share repurchases, timing, liquidity
JEL Classification: G14, G32, G35working papers series
Date posted: March 17, 2005 ; Last revised: February 15, 2009
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