Determinants of share returns surrounding share repurchase announcement: evidence from China
Abstract
This current study investigates the firms’ share returns and operating performance surrounding firms’ share repurchase annoucement in China’s A-share market for the period 2000 to 2012. The empirical results show that firms with higher sales growth rate are more likely to send a positive signal to the market though share repurchase. In addition, we find that the higher a firm’s price-to-earnings ratio (measure of overvaluation), the lower the firm’s cumulative abnormal returns. The results indicate that the Chinese share markets put more emphasis on the firm’s future growth and share overvaluation. We also find that the repurchase announcement has a positive impact on the firm’s operating performance measures such as return on assets, earnings per share and asset turnover ratio.... [Show full abstract]
Keywords
market response; China; share repurchase; signalling hypothesis; leverage hypothesis; Chinese marketFields of Research
140305 Time-Series Analysis; 150202 Financial EconometricsDate
2016Type
ThesisCollections
- Masters Theses [809]