题名

Operating Performance and Investment Expenditures Following Open Market Share Repurchases

DOI

10.6504/JOM.2009.26.01.06

作者

Nai-Hui Su;Chan-Jane Lin

关键词

Open market share repurchases ; Information signaling hypothesis ; Free cash flow hypothesis ; Operating performance ; Investment expenditures

期刊名称

管理學報

卷期/出版年月

26卷1期(2009 / 02 / 01)

页次

97 - 110

内容语文

英文

英文摘要

We examine long-term operating performance and investment expenditures following open market share repurchase announcements between August 2000 and December 2003 by firms whose shares traded on the Taiwan Stock Exchange (TSE) or OTC market. We find that repurchasing firms experience significant abnormal declines in operating performance relative to non-repurchasing firms in the year preceding the event. Further, we do not find any evidence that our sample firms outperform the matching firms in the 4 years following the announcement of the share repurchase programs. Our findings do not support the idea that share repurchases signal an improvement in future operating performance. With respect to the investment expenditures, our empirical results indicate that repurchasing firms do not invest more than their industry peers after the repurchase announcement, which tends to support the prediction of the free cash flow hypothesis. However, we find no evidence that firms reduce their cash reserves after the share repurchase announcements. Overall, this study provides limited evidence to support for the free cash flow hypothesis.

主题分类 社會科學 > 管理學
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