IDEAS home Printed from https://ideas.repec.org/a/pfq/journl/v71y2025i2p29-49.html
   My bibliography  Save this article

The Impact of Open-Market Share Buyback Announcements by Leading European Companies

Author

Listed:
  • Ács, Márton
  • Malatinszky, Gábor

Abstract

We analyzed a sample of open market repurchase announcements from 76 leading European companies included in the Stoxx Europe 600 index between 2020 and 2024 and found a significant average cumulative abnormal return of 1.11% within a 3-day event window. Our findings revealed that market reactions were significant during the period between 2020 and 2022, amidst uncertainties caused by the spread of the COVID-19 pandemic and the outbreak of the Russian-Ukrainian war, whereas no significant reactions were observed in the calmer market environment of 2023 and 2024. At the company level, differences in market effects were explained by capital structure theory, indicating that the market particularly rewarded the open market repurchases of firms with leverage ratios below target, prior to the announcements. Importantly, during crises, this effect was only present if leverage levels remained moderate even after the equity transactions.

Suggested Citation

  • Ács, Márton & Malatinszky, Gábor, 2025. "The Impact of Open-Market Share Buyback Announcements by Leading European Companies," Public Finance Quarterly, Corvinus University of Budapest, vol. 71(2), pages 29-49.
    • Handle: RePEc:pfq:journl:v:71:y:2025:i:2:p:29-49
    DOI: https://doi.org/10.35551/PFQ_2025_2_2
    as

    Download full text from publisher

    File URL: https://unipub.lib.uni-corvinus.hu/11559/
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.35551/PFQ_2025_2_2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Information and market efficiency; event study; international financial markets; payout policy;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

    Statistics

    Access and download statistics

    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:pfq:journl:v:71:y:2025:i:2:p:29-49. 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: Adam Hoffmann (email available below). General contact details of provider: https://edirc.repec.org/data/bkeeehu.html .

    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.