Open Market Stock Repurchase Programs and Liquidity
In this paper I examine the behavior of bid and ask spreads and depths around announcements of open market stock repurchase programs. For a sample of 195 announcements from 1988 to 1990, I find statistically significant evidence of a small decline in spreads and no evidence of a shift in depths following the announcement date. Results are similar for a subsample of firms experiencing post-announcement declines in the number of shares outstanding. I conclude that open market repurchase programs as used recently do not adversely affect market liquidity.
Year of publication: |
1994
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Authors: | Wiggins, James B |
Published in: |
Journal of Financial Research. - Southern Finance Association - SFA, ISSN 0270-2592. - Vol. 17.1994, 2, p. 217-29
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Publisher: |
Southern Finance Association - SFA Southwestern Finance Association - SWFA |
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