Buybacks Around the World
|Speaker:||Alberto Manconi, Tilburg University|
|Date:||Friday 19 October 2012|
|Location:||Matrix LT (Building One)|
We look at buybacks around the world, using a sample of share buyback announcements from 31 non-US countries. We find evidence of a positive market reaction to buyback announcements, followed by a long-run positive price drift. This finding is robust to controlling for conventional risk factors. In addition, we find that corporate governance mediates the effect of share buybacks on the stock price. Superior governance is associated with a stronger market reaction to the buyback announcement. Finally, we find the stronger long-run price drift occurs predominantly in countries where board approval (as opposed to shareholder approval) is sufficient to announce a buyback program.