What Drives the Declining Wealth Effect of Subsequent Share Repurchase Announcements?

摘要

Recent academic studies document that open market share repurchase announcementsin the United States generate significantly lower returns than those reported in earlier studies.We find that the lower announcement return is associated with an increasing number of subsequentannouncements in the more recent periods. Although the announcement period return from theinitial announcement is positive, subsequent announcement returns are significantly decreasing.Further, we find that the decreasing returns of subsequent announcements are attributed to firmswith negative past repurchase announcement returns. Our multivariate regression test results areconsistent with the notion that the decreasing subsequent repurchase announcement returns aredriven by hubris-endowed managers.