Actual Share Repurchases, Timing and Liquidity

26 Pages Posted: 5 Nov 2006 Last revised: 2 May 2014

See all articles by Edith Ginglinger

Edith Ginglinger

Université Paris-Dauphine, PSL Research University; European Corporate Governance Institute (ECGI)

Jacques Hamon

Université Paris Dauphine - CEREG

Abstract

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.

Keywords: Repurchase, Timing, Liquidity, Euronext Paris

JEL Classification: G14, G32, G35

Suggested Citation

Ginglinger, Edith and Hamon, Jacques, Actual Share Repurchases, Timing and Liquidity. Journal of Banking and Finance, 2007, 31, 3, 915-938, Available at SSRN: https://ssrn.com/abstract=942231

Edith Ginglinger (Contact Author)

Université Paris-Dauphine, PSL Research University ( email )

Place du Maréchal de Tassigny
Paris, Cedex 16 75775
France

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Jacques Hamon

Université Paris Dauphine - CEREG ( email )

Place du Marechal de Lattre Tassigny
Paris
France