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Share repurchase regulations: Do firms play by the rules?

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  • Ginglinger, Edith
  • Hamon, Jacques

Abstract

Open market share repurchases are strictly regulated to prevent managers from taking advantage of selling shareholders. We examine compliance with these rules in France, where the mandatory disclosure of share repurchases provides detailed information on repurchases actually undertaken. Using a database containing 36,848 repurchases made by 352 French firms over the period 2000-2002, we show that very few firms fully comply with the regulations for all their buybacks. We document that illegal repurchases before earnings announcements are the most detrimental to selling shareholders.

Suggested Citation

  • Ginglinger, Edith & Hamon, Jacques, 2009. "Share repurchase regulations: Do firms play by the rules?," International Review of Law and Economics, Elsevier, vol. 29(2), pages 81-96, June.
  • Handle: RePEc:eee:irlaec:v:29:y:2009:i:2:p:81-96
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    Citations

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    Cited by:

    1. Foued Hamouda & Mounira Ben Arab, 2013. "Board of directors and insider trading with share repurchase programs," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(2), pages 405-418, May.
    2. David, Thomas & Ginglinger, Edith, 2016. "When cutting dividends is not bad news: The case of optional stock dividends," Journal of Corporate Finance, Elsevier, vol. 40(C), pages 174-191.
    3. Patrice Charlier & Céline Du Boys, 2009. "Gouvernance Familiale Et Repartition De La Valeur : Etude Des Politiques De Distribution Aux Actionnaires Des Entreprises Familiales Cotees," Post-Print halshs-00455729, HAL.

    More about this item

    Keywords

    Open market share repurchases Insider trading Regulation Liquidity;

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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