Signaling power of open market share repurchases in Germany

被引：28

作者：

Hackethal A. ^{[1
]}

Zdantchouk A. ^{[2
]}

机构：

[1] European Business School

[2] Freitag and Co., Frankfurt am Main

来源：

Financial Markets and Portfolio Management | 2006年 / 20卷 / 2期

关键词：

Event study; Open market share repurchases; Repurchase policy and regulation; Undervaluation signaling;

D O I：

10.1007/s11408-006-0011-9

中图分类号：

学科分类号：

摘要：

This paper shows that abnormal stock price returns around the date of open market repurchase announcements are four times higher in Germany than in the USA (12 ver. 3%). We hypothesize that this observation can be explained by national differences in repurchase regulations. Our empirical evidence indicates that German managers primarily buy back shares to signal an undervaluation of their firm. We demonstrate that the stringent repurchase process prescribed by German law attributes a higher credibility to undervaluation signals than do the lax US regulations, and thereby corroborates our hypothesis.

引用

页码：123 / 151

页数：28

共 48 条

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