Operating Performance Around Share Repurchases - Evidence from Poland

Kód výsledku v 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>

Výsledek na webu

<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>

Jazyk výsledku

angličtina

Název v původním jazyce

Operating Performance Around Share Repurchases - Evidence from Poland

Popis výsledku v původním jazyce

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.

Název v anglickém jazyce

Operating Performance Around Share Repurchases - Evidence from Poland

Popis výsledku anglicky

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.

Druh

J_SC - Článek v periodiku v databázi SCOPUS

CEP obor

—

OECD FORD obor

50202 - Applied Economics, Econometrics

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2022

Kód důvěrnosti údajů

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

Název periodika

Forum Scientiae Oeconomia

ISSN

2300-5947

e-ISSN

—

Svazek periodika

10

Číslo periodika v rámci svazku

4

Stát vydavatele periodika

PL - Polská republika

Počet stran výsledku

15

Strana od-do

117-131

Kód UT WoS článku

—

EID výsledku v databázi Scopus

2-s2.0-85145375242