IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v48y2012i0p200-229.html
   My bibliography  Save this article

The Impact of Open-Market Share Repurchases on Long-Term Stock Returns: Evidence from the Taiwanese Market

Author

Listed:
  • Nai-Hui Su
  • Chan-Jane Lin

Abstract

This study examines long-term stock returns following open-market share repurchases of listed firms in Taiwan. The empirical results based on event-time cumulative abnormal returns (CARs) and buy-and-hold abnormal returns (BHARs) show that announcing firms do not experience significant positive long-term return relative to the control firms. Moreover, using the calendar-time portfolio approach, we find the abnormal returns are significantly negative over twelve, twenty-four, and thirty-six months, suggesting stocks of firms that repurchase their shares are underperformed in the postannouncement period. The implication from our results is that in Taiwan, share repurchases are mainly used to stabilize stock price during a market downturn rather than to signal a firm's future prospects.

Suggested Citation

  • Nai-Hui Su & Chan-Jane Lin, 2012. "The Impact of Open-Market Share Repurchases on Long-Term Stock Returns: Evidence from the Taiwanese Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(0), pages 200-229, July.
    • Handle: RePEc:mes:emfitr:v:48:y:2012:i:0:p:200-229
    as

    Download full text from publisher

    File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=E24448R7V6765W5G
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alquhaif, Abdulsalam & Al-Gamrh, Bakr & Abdul Latif, Rohaida, 2020. "An overview of share buybacks: A descriptive case from Malaysia," Journal of Behavioral and Experimental Finance, Elsevier, vol. 28(C).
    2. Mohamed Albaity & Diana Syafiza Said, 2016. "Impact of Open-Market Share Repurchases on Long-Term Stock Returns," SAGE Open, , vol. 6(4), pages 21582440166, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:48:y:2012:i:0:p:200-229. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.