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Share repurchase regulations: do firms play by the rules?

Author

Listed:
  • Edith Ginglinger

    () (DRM - Dauphine Recherches en Management - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique)

  • Jacques Hamon

    () (DRM - Dauphine Recherches en Management - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique)

Abstract

Open market share repurchases are strictly regulated to prevent companies from profiting from insider information. We examine compliance with these rules in France, where the mandatory disclosure of share repurchases provides detailed information on repurchases actually undertaken. Using a database containing 36,848 repurchases made by 352 French firms over the period 2000-2002, we show that very few firms fully comply with the regulations for all their buybacks. Non-compliance has an adverse effect on liquidity only for the smallest and least liquid firms.

Suggested Citation

  • Edith Ginglinger & Jacques Hamon, 2009. "Share repurchase regulations: do firms play by the rules?," Post-Print halshs-00143974, HAL.
  • Handle: RePEc:hal:journl:halshs-00143974
    DOI: 10.1016/j.irle.2008.12.002
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00143974
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    File URL: https://halshs.archives-ouvertes.fr/halshs-00143974/document
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. David, Thomas & Ginglinger, Edith, 2016. "When cutting dividends is not bad news: The case of optional stock dividends," Journal of Corporate Finance, Elsevier, vol. 40(C), pages 174-191.
    2. Foued Hamouda & Mounira Ben Arab, 2013. "Board of directors and insider trading with share repurchase programs," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(2), pages 405-418, May.
    3. Patrice Charlier & Céline Du Boys, 2009. "Gouvernance Familiale Et Repartition De La Valeur : Etude Des Politiques De Distribution Aux Actionnaires Des Entreprises Familiales Cotees," Post-Print halshs-00455729, HAL.

    More about this item

    Keywords

    open market share repurchases; insider trading; regulations; liquidity;

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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