Actual share repurchases, timing and corporate liquidity

Hamon, Jacques; Ginglinger, Edith

Hamon, Jacques; Ginglinger, Edith (2003), Actual share repurchases, timing and corporate liquidity, AFFI (Association Française de Finance), 2003-12, Paris, France

Type

Communication / Conférence

Date

2003

Conference title

AFFI (Association Française de Finance)

Conference date

2003-12

Conference city

Paris

Conference country

France

Metadata

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Author(s)

Hamon, Jacques
Ginglinger, Edith

Abstract (EN)

Research on the impact of open market share repurchases has been hindered by the lack of dataavailable on actual share repurchases in many countries, including the US. Using a previouslyunused 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 measuredby bid–ask spread or depth. Our results also indicate that share repurchases largely reflect contrariantrading rather than managerial timing ability.

Subjects / Keywords

Open market share repurchases; Liquidity

JEL

G35 - Payout Policy
G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
G14 - Information and Market Efficiency; Event Studies; Insider Trading