The intra-industry effects of share buy back announcement

• Main Author: 許神扶
• Other Authors: 沈瑞畿
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/11312512111691413582

碩士 === 南台科技大學 === 會計資訊系 === 93 === Several studies have examined information content and information transfer effects of share buy back announcements, and found share buy back announcements convey not only firm-specific but industry-wide information. In view of only few evidences about information transfer effects of share buy back announcements in Taiwan, we use the share buy back announcements from the date the system of treasury stock has been practiced to the end of 2002 to examine whether their industry rivals have abnormal stock returns during the period of announcement, and what will effect the abnormal stock returns. The empirical results indicate both announcing firms and their industry rivals have positive abnormal returns from the announcement day to Day +4. It shows share buy back announcements have intra-industry effect in Taiwan. In addition, cross-sectional analysis suggests that industry rivals experience a positive information transfer effect if the magnitude of the announcing firms’ abnormal returns and the degree of similarity in cash flows between the announcing firms and their industry counterparts are more.