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Testing the managerial timing ability: Evidence from stock repurchases in Japan

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  • Ishikawa, Masaya
  • Takahashi, Hidetomo

Abstract

In this paper, we test whether corporate managers have the ability to time the market, which is still controversial in the corporate finance literature. In empirical analyses, we show that firms conduct share repurchase programs when stock prices decreased in the previous month and that firms conducting market share repurchase programs outperform the market over the subsequent months. The evidence implies that corporate managers are informed and/or skillful at detecting mispricing in the stock markets.

Suggested Citation

  • Ishikawa, Masaya & Takahashi, Hidetomo, 2011. "Testing the managerial timing ability: Evidence from stock repurchases in Japan," Finance Research Letters, Elsevier, vol. 8(1), pages 21-27, March.
    • Handle: RePEc:eee:finlet:v:8:y:2011:i:1:p:21-27
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    References listed on IDEAS

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    Cited by:

    1. Adhiraj Sodhi & Cesario Mateus & Irina Mateus & Aleksandar Stojanovic, 2023. "Determinants of Repurchase Size: Evidence from the UK," JRFM, MDPI, vol. 16(9), pages 1-29, September.
    2. Ma, Pengfei & Li, Chengcheng & Wang, Xiaoqiong, 2024. "Why do undervalued firms repurchase shares? Evidence based on the market-timing effect in China," Global Finance Journal, Elsevier, vol. 59(C).
    3. Drousia, Angeliki & Episcopos, Athanasios & Leledakis, George N., 2019. "Market reaction to actual daily share repurchases in Greece," The Quarterly Review of Economics and Finance, Elsevier, vol. 74(C), pages 267-277.
    4. De Ridder, Adri, 2015. "Additional evidence on the frequency of share repurchases and managerial timing," The Quarterly Review of Economics and Finance, Elsevier, vol. 56(C), pages 154-164.
    5. Wang, Jin-Ying, 2023. "Tax clientele and share repurchase execution," The Quarterly Review of Economics and Finance, Elsevier, vol. 88(C), pages 168-176.

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