The Effects of Stock Repurchases on Rival Firms

Research output: Contribution to journalArticle

52 Scopus citations

Abstract

This paper investigates the stock price behavior of rival firms in the same industry as firms announcing stock repurchase tender offers. Using a sample of 134 repurchase announcements, I find that rival firms on average realize insignificant announcement period abnormal returns. Negative rival stock price performance is detected over longer intervals surrounding the announcement period and for a subset of announcements which ex ante were identified as most likely to affect rivals. This evidence, however, is statistically weak and does little to alter the overall conclusion that the information in repurchase announcements is primarily firm‐specific. 1991 The American Finance Association

Original languageEnglish (US)
Pages (from-to)707-716
Number of pages10
JournalJournal of Finance
Volume46
Issue number2
DOIs
StatePublished - 1991
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Economics and Econometrics
  • Finance

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