학회소식
공지사항
[2011년 제 4차] Managerial Entrenchment and Open-Market Share Repur
작성자 : 관리자
조회수 : 856
게시일 :
2011-12-07
This study examines the impact of minority shareholder protection on open-market share repurchases. When controlling owners commit low level of equity investment but retain tight control of their firms, the discrepancy between voting rights and cash flow rights induces an entrenchment problem and undermines the protection mechanism of minority shareholders. This study finds that the market reaction to share repurchase announcements is contingent on the extent of minority protection. The efficacy of signaling by repurchase announcements is weakened for firms with more severe entrenchment problems, suggesting that repurchase announcements are less informative when firms are subject to a higher extent of managerial entrenchment. Moreover, the results show that lower minority protection is negatively associated with the long-term operating performance following repurchase announcements.