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Are Buybacks Good for Long-Term Shareholder Value? Evidence from Buybacks around the World

Published online by Cambridge University Press:  14 September 2018


Using a sample of over 9,000 buyback announcements from 31 non-U.S. countries, we find support for the results of studies based on U.S. data: On average, share repurchases are associated with significant positive short- and long-term excess returns. However, excess returns depend on the likelihood of undervaluation and the efficiency and liquidity of equity markets. In contrast to findings in U.S. markets, we do not find that these long-term excess returns are simply a compensation for takeover risk or have become less significant in recent years.

Research Article
Copyright © Michael G. Foster School of Business, University of Washington 2018 

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We thank Raquel Oliveira of the Central Bank of Brazil for help clarifying the Brazilian regulation, and Cornelia Schuette for research assistance. We also thank Mathias Kronlund (the referee), Paul Malatesta (the editor), and seminar participants at Tilburg University, University of Wuppertal, University of Exeter, University of Warwick, the 2013 American Finance Association, European FMA, EFMA, and Panayotis Andreou, Dimitris Andriosopoulos, Ken Bechman, Bill Megginson, Roni Michaely, and Laura Starks for valuable discussions and comments.


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