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Stock price reaction to share repurchase announcements by banks in normal and crisis times

Author

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  • Jijun Niu

    (Beedie School of Business, Simon Fraser University, Canada)

Abstract

This paper studies stock price reaction to share repurchases announced by U.S. banks between January 2002 and December 2008. Using the standard event study method, we find that the average abnormal return around share repurchase announcements is positive in both normal and crisis times. We also find that the average abnormal return is significantly higher in crisis times. Our results are consistent with the signaling hypothesis for share repurchases.

Suggested Citation

  • Jijun Niu, 2015. "Stock price reaction to share repurchase announcements by banks in normal and crisis times," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 3(2), pages 55-62, April.
    • Handle: RePEc:lrc:lareco:v:3:y:2015:i:2:p:55-62
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    More about this item

    Keywords

    Banks; Financial crisis; Share repurchase; Signaling.;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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