A Long-term performance after share buybacks of listed French companies
Keywords:
Long-term performance, stock repurchases, CAR, BHAR, Fama and FrenchAbstract
Studies examining long-term performance after stock repurchases provide mixed results. I point out two substantive problems in samplings of early studies. First, we should distinguish whether or not firms actually repurchase shares following announcements of repurchase programs. Second, as some firms frequently announce repurchase programs, we should consider overlapping announcements during the performance estimation period to avoid any confounding effects. Using a sample that corrects for these problems and the calendar portfolio regression method, I find strong evidence that firms that announce repurchase programs infrequently and repurchase shares actually experience significant longterm abnormal returns. These findings provide an explanation of why some previous studies failed to find significant positive long-term performance. Studies examining long-term stock market performance following the annual reports of French companies listed between 2004 and 2019. We will detail the various methods used to analyze stock market performance. We can distinguish between the event-driven approach: the cumulative abnormal returns (CAR) method, buy-and-hold returns (BHAR) and calendar time models, namely: the three-factor model by Fama and French (1993), the four-factor model by Carhart (1997) and the five-factor model by Fama and French (2015). We then present the results of various empirical studies that have examined the long-term performance of companies involved in AR.
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