Operating Performance Around Share Repurchases - Evidence from Poland

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F46747885%3A24310%2F22%3A00010438" target="_blank" >RIV/46747885:24310/22:00010438 - isvavai.cz</a>

Result on the web

<a href="https://ojs.wsb.edu.pl/index.php/fso/article/view/626/334" target="_blank" >https://ojs.wsb.edu.pl/index.php/fso/article/view/626/334</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.23762/FSO_VOL10NO4_6" target="_blank" >10.23762/FSO_VOL10NO4_6</a>

Result language

angličtina

Original language name

Operating Performance Around Share Repurchases - Evidence from Poland

Original language description

The issue of share repurchases has attracted the attention of numerous researchers and still lacks a consistent explanation. The main aim of the study is to investigate the changes in operating performance around share repurchase announcements. Until now, the majority of research has concentrated on the stock market reaction to share repurchase announcements. This research was conducted on a sample of companies listed on NewConnect (a stock market operated by the Warsaw Stock Exchange in the form of an alternative trading system) devoted to young and growing companies. It is assumed that operating performance improves after share repurchases, and that share repurchases are a method that indicates promising future prospects of young and growing firms. The research sample consisted of 378 firm-year observations (54 companies over a seven-year period). The authors measured the operating performance by means of profitability ratios (ROA and ROE). Operating performance around the share repurchase announcements was compared by applying the Wilcoxon test. The findings suggest that operating performance deteriorates after share repurchase announcements. This contradicts the prior assumptions of this study, which were consistent with the signalling theory of share repurchases. The results imply that the free cash flow hypothesis is more appropriate when it comes to explaining the share repurchase decisions of the sample firms. The findings may be valuable as the scope of research is widened beyond the market reaction to the financial strategy of the company. The research also tackles specific kinds of companies – young and growing – whereas previous studies have focused on mature companies from emerged markets. The findings could be also interesting for investors and company managers.

Czech name

—

Czech description

—

Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

—

OECD FORD branch

50202 - Applied Economics, Econometrics

Project

—

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2022

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Forum Scientiae Oeconomia

ISSN

2300-5947

e-ISSN

—

Volume of the periodical

10

Issue of the periodical within the volume

4

Country of publishing house

PL - POLAND

Number of pages

15

Pages from-to

117-131

UT code for WoS article

—

EID of the result in the Scopus database

2-s2.0-85145375242