Using Treasury 'Repurchase' Shares to Stabilize Stock Markets

26 Pages Posted: 9 Oct 2003

Abstract

This paper aims to examine one of the most important issues in the international corporate laws, which is the issue of share repurchases known as treasury shares. This paper investigated corporate laws, stock exchange regulations, research literatures and stock trading volume for repurchase activities, covering a sample of thirty-five countries developed and emerging markets. The study found that there is an increasing movement in the world stock market towards adopting or deregulating the share repurchase activities, More than half of the selected sample witnessed a change in the related laws (especially corporate laws) of share repurchases during the period 1995 to 2000. Moreover, there is a toleration to use the treasury share in enhancing the stock market during stock crises and extraordinary market price volatility. Based on upon findings, a model has been suggested and articulated to be considered as a stabilization instrument for stock marketing.

Keywords: Share repurchasing, Corporate laws, Stock market stability

JEL Classification: G14, G18, G35

Suggested Citation

Sabri, Nidal Rashid, Using Treasury 'Repurchase' Shares to Stabilize Stock Markets. International Journal of Business, Vol. 8, No. 4, 2003. Available at SSRN: https://ssrn.com/abstract=450042 or http://dx.doi.org/10.2139/ssrn.450042

Nidal Rashid Sabri (Contact Author)

Birzeit University ( email )

Birzeit, West Bank
Palestine
972 2 2810396 (Phone)
972 2 2982963 (Fax)

HOME PAGE: http://home.birzeit.edu/commerce/sabri

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