Signaling power of open market share repurchases in Germany
This paper shows that abnormal stock price returns around open market repurchase announcements are about four times higher in Germany than in the US (12% versus 3%). We hypothesize that this observation can be explained by country differences in repurchase regulation. Our empirical evidence indicates that German managers primarily buy back shares to signal an undervaluation of their firm. We demonstrate that the stringent repurchase process prescribed by German law attributes a higher credibility to such a signal than lax US regulations and thereby corroborate our hypothesis.
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| Author: | Andreas Hackethal, Alexandre Zdantchouk |
|---|---|
| URN: | urn:nbn:de:hebis:30-5881 |
| Document Type: | Working Paper |
| Language: | English |
| Date of Publication (online): | 11.04.2005 |
| Year of first Publication: | 2005 |
| Publishing Institution: | Univ.-Bibliothek Frankfurt am Main |
| HeBIS PPN: | 128735538 |
| Institutes: | Wirtschaftswissenschaften |
| Dewey Decimal Classification: | 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Veröffentlichungsvertrag für Publikationen ohne Print on Demand |
