EU regulation and open market share repurchases: New evidence
This paper re-examines the impact of the EU Market Abuse Directive (MAD) on the market reaction around share repurchase announcements. We use a unique hand-collected dataset of firms listed on the Athens Stock Exchange, and we find evidence that contrasts with previous conclusions for large European...
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Published in | IDEAS Working Paper Series from RePEc |
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Main Authors | , , , |
Format | Paper |
Language | English |
Published |
St. Louis
Federal Reserve Bank of St. Louis
01.01.2020
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Online Access | Get full text |
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Summary: | This paper re-examines the impact of the EU Market Abuse Directive (MAD) on the market reaction around share repurchase announcements. We use a unique hand-collected dataset of firms listed on the Athens Stock Exchange, and we find evidence that contrasts with previous conclusions for large European economies. The implementation of MAD is followed by a significant improvement in announcement abnormal returns, an improvement which remains even when we control for several firm-specific factors, industry fixed effects, and potential endogeneity issues. We attribute our findings to cross-country differences in institutional framework and pre-MAD existing national laws. Collectively, our results support the notion that EU directives do not have a uniform effect across Member States. Thus, the impact of such reforms should also be examined in individual capital market studies. |
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