Back Issues 11-20

AN EMPIRICAL STUDY OF SHARE REPURCHASE: EVIDENCE FROM TAIWAN STOCK MARKET

Ai-Chi Hsu

Department of Finance

National Yunlin University of Science and Technology, Taiwan R.O.C.

Szu-Hsien Lin*

Department of Southeast Asian Economy, Trade and Digital Finance

TransWorld University, Taiwan R.O.C.

*Corresponding Author: This email address is being protected from spambots. You need JavaScript enabled to view it.

Chun-Hung Chen

Department of Finance

National Yunlin University of Science and Technology, Taiwan R.O.C.

Yu-Syuan Liang

Department of Finance

National Yunlin University of Science and Technology, Taiwan R.O.C.

Abstract

This study investigates the announcement effect of share repurchase upon abnormal return by using the event study model. We find that stock prices ordinarily stayed low before companies announced share repurchase. After the announcement, there were significantly positive abnormal returns. There was a significantly positive relationship between the abnormal return in the prior period and that in the current period. When the previous abnormal return had been larger, the current abnormal return would be larger as well. Meanwhile, the larger announced repurchase rates would also bring larger abnormal returns. But when the actual repurchase rates were higher, the cumulative abnormal return appeared to have negative significance.

Keywords: Share Repurchase, Abnormal Return, Repurchase Rate

Attachments:

0996 Final.pdf

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194 kB