The Intra-Industries Effect of Share Repurchase during the Financial Tsunami: Cross Industries Evidence from Taiwan

• Main Authors: LIU, PO-CHUN, 劉柏均
• Other Authors: CHENG, MING-CHANG
• Format: Others
• Language: en_US
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/375ge5

碩士 === 國立中正大學 === 企業管理系研究所 === 104 === Since 2000, share repurchase announcements became one of the most common financial strategy for firms, especially during the Financial Tsunami. However, there was a relative few researches discussed in the intra-industry effect after share repurchase announcements in the same industry. The purpose of our study is to explore whether there were any different intra-industry effects cross different industries in Taiwan before, during and after the Financial Tsunami. In terms of research methods, TSE and OTC firms, which had been performed share repurchase announcements were distinguished into three sub-industry groups and sub-periods from 2004 to 2012. In each group, we used event study methods to investigate announcement and intra-industry effects, and found difference in related proxy variables by regression analysis. The statistical result indicated that intra-industry effect really existed in Taiwan security market after share repurchase announcements, the most intra-industry effects were contagion effects, but there were insignificant intra-industry effects for electronic industry before the Tsunami, insignificant intra-industry effects for conventional industry during the Tsunami and competitive effect for financial industry after the Tsunami. Moreover, our regression result showed that it was the significant effect of information strength on repurchasing firms, and effects of the competition degree, undervaluation degree, financial leverage and the size on rivals were significant changed in different industries and periods. The result elucidated that intra-industry effect of share repurchase announcement was confirmed. In practice, it could be a guideline for managers or investors to adjust their financial investment strategy.