Share repurchase and stock price synchronicity
This paper explores the impact of open market share repurchases (OMR) on stock price synchronicity. We find that share repurchases significantly enhances the information content of stock prices, reflected in reduced price synchronicity. The mechanism includes repurchases drawing investor attention,...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2024-04-01
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| Series: | China Journal of Accounting Studies |
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| Online Access: | https://www.tandfonline.com/doi/10.1080/21697213.2024.2336090 |
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| _version_ | 1850032100787355648 |
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| author | Chenghao Huang Zhi Jin |
| author_facet | Chenghao Huang Zhi Jin |
| author_sort | Chenghao Huang |
| collection | DOAJ |
| description | This paper explores the impact of open market share repurchases (OMR) on stock price synchronicity. We find that share repurchases significantly enhances the information content of stock prices, reflected in reduced price synchronicity. The mechanism includes repurchases drawing investor attention, encouraging more idiosyncratic information disclosures, and increasing media coverage. This effect is more pronounced in firms with high information asymmetry, those leveraging repurchases for reputation, or emphasizing R&D. Further analysis reveals that characteristics and execution of repurchase programmes impact differently.Overall, OMR acts as an effective signal, attracting attention from external market participants and improving the firm’s informational environment. |
| format | Article |
| id | doaj-art-ce2c68d016bd493484e0a9c758bb62f4 |
| institution | DOAJ |
| issn | 2169-7213 2169-7221 |
| language | English |
| publishDate | 2024-04-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | China Journal of Accounting Studies |
| spelling | doaj-art-ce2c68d016bd493484e0a9c758bb62f42025-08-20T02:58:46ZengTaylor & Francis GroupChina Journal of Accounting Studies2169-72132169-72212024-04-0112231133910.1080/21697213.2024.2336090Share repurchase and stock price synchronicityChenghao Huang0Zhi Jin1School of Economics and Management, Nanchang University, Nanchang, Jiangxi, ChinaSchool of Accounting, Southwestern University of Finance and Economics, Chengdu, Sichuan, ChinaThis paper explores the impact of open market share repurchases (OMR) on stock price synchronicity. We find that share repurchases significantly enhances the information content of stock prices, reflected in reduced price synchronicity. The mechanism includes repurchases drawing investor attention, encouraging more idiosyncratic information disclosures, and increasing media coverage. This effect is more pronounced in firms with high information asymmetry, those leveraging repurchases for reputation, or emphasizing R&D. Further analysis reveals that characteristics and execution of repurchase programmes impact differently.Overall, OMR acts as an effective signal, attracting attention from external market participants and improving the firm’s informational environment.https://www.tandfonline.com/doi/10.1080/21697213.2024.2336090Share repurchasestock price synchronicityinstitution reforminformation environment |
| spellingShingle | Chenghao Huang Zhi Jin Share repurchase and stock price synchronicity China Journal of Accounting Studies Share repurchase stock price synchronicity institution reform information environment |
| title | Share repurchase and stock price synchronicity |
| title_full | Share repurchase and stock price synchronicity |
| title_fullStr | Share repurchase and stock price synchronicity |
| title_full_unstemmed | Share repurchase and stock price synchronicity |
| title_short | Share repurchase and stock price synchronicity |
| title_sort | share repurchase and stock price synchronicity |
| topic | Share repurchase stock price synchronicity institution reform information environment |
| url | https://www.tandfonline.com/doi/10.1080/21697213.2024.2336090 |
| work_keys_str_mv | AT chenghaohuang sharerepurchaseandstockpricesynchronicity AT zhijin sharerepurchaseandstockpricesynchronicity |