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Kapitalmarktrelevanz deutscher Aktienrückkaufprogramme

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  • Ralf Schremper

    (Bertelsmann AG)

Abstract

Summary Since the “Control and Transparency in Business Act” (KonTraG) came into effect on 1 May 1998, German firms are permitted to repurchase their own shares. Buy backs gain increasing popularity in Germany and more than a hundred corporations have already been engaged in repurchase programs. However, it is still an unanswered empirical question how the German capital market reacts to share repurchases. Therefore, it will be analyzed employing an event study whether or not there are any excess returns associated with share repurchase announcements. In summary, the evidence indicates that there is a highly significant market reaction on the announcement day and the following day. The cumulative average excess return adds up to 4–5%. Furthermore, trading volumes of repurchasing firms are significantly higher in the announcement period. The capital market reaction is consistent with the dividend substitution hypothesis, and is strongly influenced by the prevailing capital structure.

Suggested Citation

  • Ralf Schremper, 2003. "Kapitalmarktrelevanz deutscher Aktienrückkaufprogramme," Schmalenbach Journal of Business Research, Springer, vol. 55(6), pages 578-605, September.
    • Handle: RePEc:spr:sjobre:v:55:y:2003:i:6:d:10.1007_bf03372716
    DOI: 10.1007/BF03372716
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    References listed on IDEAS

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    More about this item

    Keywords

    G14; G32; G35;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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