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The performance of Taiwanese firms after a share repurchase announcement

Author

Listed:
  • Chuan-Hao Hsu

    (Feng Chia University)

  • Hung-Gay Fung

    (University of Missouri-St. Louis)

  • Yi-Ping Chang

    (Soochow University)

Abstract

This study uses stochastic dominance analysis to examine the financial performance of Taiwanese firms from 2000 to 2013 after their announcement of a share repurchase program. Our results show that the firms in the repurchase portfolio perform poorly prior to the announcement, but improve dramatically to outperform different benchmarks after the repurchase announcement. For firms in the repurchase portfolio, we find that (1) the firms with a high book-to-market ratio outperform firms with a low book-to-market ratio, (2) smaller firms outperform larger firms, and (3) there is no significant difference in performance between firms with different percentages of completing the repurchase programs.

Suggested Citation

  • Chuan-Hao Hsu & Hung-Gay Fung & Yi-Ping Chang, 2016. "The performance of Taiwanese firms after a share repurchase announcement," Review of Quantitative Finance and Accounting, Springer, vol. 47(4), pages 1251-1269, November.
    • Handle: RePEc:kap:rqfnac:v:47:y:2016:i:4:d:10.1007_s11156-015-0537-x
    DOI: 10.1007/s11156-015-0537-x
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    References listed on IDEAS

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    Cited by:

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    3. Joanna Golden, 2018. "The Effect of Shareholder Rights and Information Asymmetry on Stock-Option-Related Repurchase Activity," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-41, June.

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    More about this item

    Keywords

    Repurchase portfolio; Long-term performance; Stochastic dominance;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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