Financial decisions can be used to convey information to uninformed market participants aiming to mitigate pricing inefficiencies. Corporate share repurchases are particularly interesting since they have emerged as an integral component of corporate payout policy with a global spread. The...

We analyze the decision to announce an open market share repurchase and the share price reaction to the announcement. We use a conditional estimation approach which takes into account that the repurchase decision is made rationally and that, consequently, there is a potential selection bias....