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The impact of internal and external factors on the relationship between information opacity and open‐market repurchases

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  • Chih‐Wei Wang
  • Jing‐Yu Peng

Abstract

This study investigates the linkage between information opacity and open‐market share repurchases in emerging markets. We measure information opacity by accruals quality and find that firms with higher levels of information opacity experience more positive market reactions following repurchase announcements, which remain after controlling for some firm characteristics. We document that information opacity is positively related to announcement returns only in firms with strong corporate governance, controlled by a single family, or with a low level of foreign ownership. Our results reveal that the positive relationship between information opacity and announcement returns still exists even during the global financial crisis.

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  • Chih‐Wei Wang & Jing‐Yu Peng, 2021. "The impact of internal and external factors on the relationship between information opacity and open‐market repurchases," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(3), pages 4085-4118, September.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:3:p:4085-4118
    DOI: 10.1111/acfi.12727
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    2. Lee, Chien-Chiang & Park, Bokyung & Wang, Chih-Wei, 2023. "The effect of asymmetric information disappears: Evidence in share repurchases and market efficiency," Finance Research Letters, Elsevier, vol. 56(C).

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