Publication Type
Journal Article
Version
publishedVersion
Publication Date
8-2020
Abstract
Recent academic studies document that open market share repurchase announcements in the United States generate significantly lower returns than those reported in earlier studies. We find that the lower announcement return is associated with an increasing number of subsequent announcements in the more recent periods. Although the announcement period return from the initial announcement is positive, subsequent announcement returns are significantly decreasing. Further, we find that the decreasing returns of subsequent announcements are attributed to firms with negative past repurchase announcement returns. Our multivariate regression test results are consistent with the notion that the decreasing subsequent repurchase announcement returns are driven by hubris-endowed managers.
Keywords
open market share repurchase, hubris, cumulative announcement returns, endowed
Discipline
Finance and Financial Management | Portfolio and Security Analysis
Research Areas
Finance
Publication
Journal of Risk and Financial Management
Volume
13
Issue
8
First Page
1
Last Page
14
ISSN
1911-8066
Identifier
10.3390/jrfm13080176
Publisher
MDPI
Citation
DING, David K.; KOERNIADI, Hardjo; and KRISHNAMURTI, Chandrasekhar.
What drives the declining wealth effect of subsequent share repurchase announcements?. (2020). Journal of Risk and Financial Management. 13, (8), 1-14.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6619
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.3390/jrfm13080176