Earticle

초록

영어

Logic suggests that a link might exist between insider trades and share repurchases for their potential to signal mispricing when market prices deviate from fair value; both events emanate from essentially the same set of decision makers. A rich set of literatures suggests that executives have timing ability with respect to both events. However, several researchers view this collective evidence with suspicion and discount the notion that the evidence reflects fundamental mispricing or managerial timing. We address this debate by considering these two transactions jointly using publicly available information to form portfolios evaluated using performance metrics common to the asset management industry as well as those commonly used in academic studies. For “value” buyback firms where the likelihood of undervaluation is seemingly a more plausible economic motivation for repurchases, insider trading provides a strong complement to the repurchase signal. The same is not true for other buyback cases where factors aside from mispricing may be motivating those repurchase decisions. Our evidence is consistent with prior studies which conclude that some managers do exhibit timing ability.

목차

Abstract
 I. Data and Methods
  A. Data
  B. Methods
 II. Insider Trading around Share Repurchase Announcements
 III. Long-Run Stock Performance
  A. Event-time monthly abnormal returns conditional on insider trading
  B. Assessing the impact of insider trading behavior
  C. Robustness
 IV. Conclusions
 References
 Table

저자

• Konan Chan [ University of Hong Kong ]
• David L. Ikenberry [ University of Colorado Boulder ]
• Inmoo Lee [ Korea Advanced Institute of Science and Technology ]
• Yanzhi (Andrew) Wang [ Yuan Ze University ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330