IDEAS home Printed from https://ideas.repec.org/a/taf/hbhfxx/v19y2018i1p49-61.html
   My bibliography  Save this article

CEO Optimism and the Credibility of Open-Market Stock Repurchase Announcements

Author

Listed:
  • Thanh Nguyen
  • Liem T. Nguyen
  • Anh Duc Ngo
  • Hari Adhikari

Abstract

Given their low-cost and low level of commitment, open-market stock repurchase announcements are often viewed by the market with a degree of skepticism, leading to a weak initial market reaction followed by positive stock price drifts. The authors argue that the repurchase announcements made by optimistic CEOs should be more credible than those made by nonoptimistic CEOs. Our results show that optimistic CEOs are more likely to actually buy back their shares after the announcements and the abnormal returns following repurchase announcements are larger for optimistic CEOs. This evidence suggests that CEO optimism is an important factor that the market seems to overlook while evaluating the credibility of open-market repurchase announcements. Our main contribution is to link one of the most important managerial traits, optimism, to the open-market repurchases.

Suggested Citation

  • Thanh Nguyen & Liem T. Nguyen & Anh Duc Ngo & Hari Adhikari, 2018. "CEO Optimism and the Credibility of Open-Market Stock Repurchase Announcements," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 19(1), pages 49-61, January.
    • Handle: RePEc:taf:hbhfxx:v:19:y:2018:i:1:p:49-61
    DOI: 10.1080/15427560.2017.1366491
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/15427560.2017.1366491
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/15427560.2017.1366491?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Königstorfer, Florian & Thalmann, Stefan, 2020. "Applications of Artificial Intelligence in commercial banks – A research agenda for behavioral finance," Journal of Behavioral and Experimental Finance, Elsevier, vol. 27(C).
    2. Kim, Hyeong Joon & Mun, Seongjae, 2022. "Terrorist attacks and corporate investment: The beneficial value of CEO overconfidence," International Review of Financial Analysis, Elsevier, vol. 84(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:hbhfxx:v:19:y:2018:i:1:p:49-61. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/hbhf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.