Abstract
Using a dataset of repurchase cases from across the globe, we analyze how repurchase patterns vary over the business cycle. In recession, firms announce uncommitted repurchases to mislead investors and stabilize falling prices; their announcements are accompanied by a 1.58% higher five-day abnormal return and a 3.8% lower completion rate. In expansion, firms repurchase to distribute excess cash; their announcements are followed by a 12.5% higher one-year abnormal return. The extent to which firms engage in such strategies is influenced by financial constraints, analyst coverage, cash flow shocks, and institutional ownership.
| Original language | English |
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| Publication status | Published - 8 Jul 2021 |
| Event | China International Conference in Finance, CICF 2021 - Shanghai, China Duration: 6 Jul 2021 → 9 Jul 2021 https://www.cicfconf.org/2021/m/index.html (Conference website) https://editorialexpress.com/conference/CICF2021/program/CICF2021.html (Conference program) |
Conference
| Conference | China International Conference in Finance, CICF 2021 |
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| Country/Territory | China |
| City | Shanghai |
| Period | 6/07/21 → 9/07/21 |
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User-Defined Keywords
- Share repurchases
- business cycle
- stock return
- stock liquidity
- firm investment