EU regulation and open market share repurchases: New evidence

The European Journal of Finance, volume 29, issue 9, 2023[10.1080/1351847X.2021.1910529]

46 Pages Posted: 16 Apr 2018 Last revised: 29 Jun 2023

See all articles by Angeliki Drousia

Angeliki Drousia

Athens University of Economics and Business - Department of Accounting and Finance

Athanasios Episcopos

Athens University of Economics and Business - Department of Accounting and Finance

George N. Leledakis

Athens University of Economics and Business, School of Business, Department of Accounting and Finance

Emmanouil G. Pyrgiotakis

University of Essex - Essex Business School

Date Written: June 28, 2023

Abstract

This paper re-examines the impact of the EU Market Abuse Directive (MAD) on the market reaction around share repurchase announcements. We use a unique hand-collected dataset of firms listed on the Athens Stock Exchange, and we find evidence that contrasts with previous conclusions for large European economies. The implementation of the MAD is followed by a significant increase in announcement abnormal returns, which is more pronounced in initial repurchase programs. Our results remain robust to a series of robustness tests. We attribute our findings to cross-country differences in institutional framework and pre-MAD existing national laws. Collectively, our results support the notion that EU directives do not have a uniform effect across Member States. Thus, the impact of such reforms should also be examined in individual capital market studies.

Keywords: Share repurchases, Market Abuse Directive, safe harbor, signaling undervaluation.

JEL Classification: G14, G15, G35

Suggested Citation

Drousia, Angeliki and Episcopos, Athanasios and Leledakis, George N. and Pyrgiotakis, Emmanouil G., EU regulation and open market share repurchases: New evidence (June 28, 2023). The European Journal of Finance, volume 29, issue 9, 2023[10.1080/1351847X.2021.1910529], Available at SSRN: https://ssrn.com/abstract=3153141 or http://dx.doi.org/10.1080/1351847X.2021.1910529

Angeliki Drousia

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece

Athanasios Episcopos (Contact Author)

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece
+30 21 0820 3364 (Phone)
+30 21 0822 8816 (Fax)

HOME PAGE: http://www.aueb.gr/users/episcopos

George N. Leledakis

Athens University of Economics and Business, School of Business, Department of Accounting and Finance ( email )

76 Patission Str.
Athens, 104 34
Greece
+30 210 8203 459 (Phone)
+30 210 8228 816 (Fax)

HOME PAGE: http://www.aueb.gr/en/faculty_page/leledakis-georgios

Emmanouil G. Pyrgiotakis

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

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