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Ownership structure and open market stock repurchases in France

Author

Listed:
  • Edith Ginglinger

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Jean-François L'Her

Abstract

This paper examines open market stock repurchases in France. We find a positive averagemarket reaction to the repurchase announcement. However, the magnitude of the pricereaction is found to depend on a number of corporate governance structure measures. Thepositive aspects of the announcement only appear for a company with a low likelihood ofbeing taken over, and with a low risk of minority shareholder expropriation. Specifically,stock repurchase programs are good news when the firm is supported by foreign institutionalinvestors, and in the case of controlled firms, when the firm has a second large shareholder,which guarantees an effective balance of power for the controlling shareholders.

Suggested Citation

  • Edith Ginglinger & Jean-François L'Her, 2006. "Ownership structure and open market stock repurchases in France," Post-Print halshs-00138292, HAL.
    • Handle: RePEc:hal:journl:halshs-00138292
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    References listed on IDEAS

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    1. Tarun Khanna & Krishna Palepu, 1999. "Emerging Market Business Groups, Foreign Investors, and Corporate Governance," NBER Working Papers 6955, National Bureau of Economic Research, Inc.
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