Signal strength adjustment behavior: Evidence from share repurchases
Signal strength adjustment behavior: Evidence from share repurchases
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信号强度调整行为：股票回购的证据
DOI：
10.1016/j.jbankfin.2022.106545
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发表时间：
2022
影响因子：
3.7
通讯作者：
Kawase Hironori
中科院分区：
文献类型：
--
作者：
Ota Koji;Lau David;Kawase Hironori
本文通过研究公开市场回购公告的信号强度调节行为，扩展了信号传递假说。鉴于OMR对回购公司来说是一项不具约束力的承诺，股市可能会仔细审查该公司OMR公告发出的低估信号的可信度。这可能会迫使经理参与各种机制，以加强OMR公告的低估信号。本文研究了当同时发布的坏消息威胁到来自OMR公告的信号的可信度时，回购公司的经理是否会修改OMR计划的条款。与我们的信号强度调整假说一致，我们发现回购公司的经理随着同时公告中的坏消息的幅度而增加(缩短)回购计划的规模(周期)。我们的结果还表明，股票市场对信号强度调整的反应是积极的，这表明它们对市场具有信息性。在使用各种技术控制样本选择偏差后，这些结果仍然成立。
This paper extends the signaling hypothesis by investigating the signal strength adjustment behavior with respect to the announcement of an open market repurchase (OMR). Given that an OMR is a non-binding commitment for the repurchasing firm, the stock market would likely scrutinize the credibility of the undervaluation signal from the OMR announcement of the firm. This may compel the manager to engage in various mechanisms in order to strengthen the undervaluation signal of the OMR announcement. This paper investigates whether managers of repurchasing firms would modify the terms of the OMR program when the simultaneous announcements of bad news threaten the credibility of the signal from the OMR announcements. Consistent with our signal strength adjustment hypothesis, we find that managers of repurchasing firms increase (shorten) the repurchase plan size (period) with the magnitude of bad news in the simultaneous announcements. Our results also show that the stock market reacts positively to the signal strength adjustments, indicating that they are informative to the market. These results hold after using various techniques to control for sample selection bias.