Publication Type

Journal Article

Version

acceptedVersion

Publication Date

6-2022

Abstract

CEO trustworthiness is positively related to long-term excess returns after buyback announcements. When the CEO is trustworthy, statements that the stock is undervalued are more credible. CEO trustworthiness is initially measured by the extent to which people in the county where the company headquarters is located trust each other. Further, the positive impact of trustworthiness on excess returns is higher when the CEO has been a long-term resident of a high-trust county, and correspondingly, trustworthy CEOs are less likely to be accused of financial misreporting. Our conclusions are confirmed when we use alternative measures of trustworthiness such as employee trust and CEO integrity.

Keywords

Buybacks, Market Timing, CEO Trustworthiness, Buyback Motivations

Discipline

Accounting | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

Journal of Financial and Quantitative Analysis

Volume

57

Issue

4

First Page

1454

Last Page

1485

ISSN

0022-1090

Identifier

10.1017/S0022109021000351

Publisher

Cambridge University Press (CUP): HSS Journals

Embargo Period

5-19-2021

Copyright Owner and License

Authors

Comments

Working paper available at https://ink.library.smu.edu.sg/soa_research/1860/

Additional URL

https://doi.org/10.1017/S0022109021000351

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