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Actual share repurchases, timing and liquidity

  • Hamon, Jacques
  • Ginglinger, Edith

Research on the impact of open market share repurchases has been hindered by the lack of data available on actual share repurchases in many countries, including the US. Using a previously unused database containing detailed information on 36,848 repurchases made by 352 French firms, we show that corporate share repurchases have a significant adverse effect on liquidity as measured by bid–ask spread or depth. Our results also indicate that share repurchases largely reflect contrarian trading rather than managerial timing ability.

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File URL: http://basepub.dauphine.fr/xmlui/bitstream/123456789/1748/2/ginglinger_actual.PDF
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Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/1748.

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Date of creation: Mar 2007
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Publication status: Published in Journal of Banking and Finance, 2007, Vol. 31, no. 3. pp. 915-938.Length: 23 pages
Handle: RePEc:dau:papers:123456789/1748
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  16. Douglas O. Cook, 2004. "On the Timing and Execution of Open Market Repurchases," Review of Financial Studies, Society for Financial Studies, vol. 17(2), pages 463-498.
  17. Miller, James M. & McConnell, John J., 1995. "Open-Market Share Repurchase Programs and Bid-Ask Spreads on the NYSE: Implications for Corporate Payout Policy," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 30(03), pages 365-382, September.
  18. Zhang, Hua, 2005. "Share price performance following actual share repurchases," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1887-1901, July.
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