Proceedings of the 8th Economics & Finance Conference, London

EFFECT OF REPURCHASE ANNOUNCEMENT ON THE POLISH ALTERNATIVE STOCK MARKET

BOGNA KAŹMIERSKA-JÓŹWIAK, ELZBIETA WROŃSKA-BUKALSKA

Abstract:

In recent years open-market share repurchase programs have become an important payout policy not only for U.S. firms, but also European. Vast literature has examined the effect of share repurchase announcement on developed countries, especially the U.S. Relatively little research has yet been published examining the emerging markets reaction on share repurchase programs. This study attempts to extend the knowledge with the information content of buy back announcements in Poland. The main aim of the study is to test the informational con-tent of share repurchase announcements on the Polish alternative stock market us-ing event study methodology. Our sample was formed by identifying share repur-chase announcements reported by companies listed on the NewConnect Stock Ex-change over the period 2007-2016. Due to the results of prior studies which give support for positive market reaction on share repurchase announcements (i.a. Ikenberry, Lakonishok and Vermaelen, 1995; Grullon and Michaely, 2002; Chan, Ikenberry, Lee, Wang, 2010) we hypothesize that firms announcing share repurchases on NewConnect experience positive valuation effects.

Keywords: share repurchase, payout policy, event study, abnormal returns, NewConnect, Poland

DOI: 10.20472/EFC.2017.008.004

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