Abstract
Research on the impact of open market share repurchases has been hindered by the lack of dataavailable on actual share repurchases in many countries, including the US. Using a previouslyunused database containing detailed information on 36,848 repurchases made by 352 French firms,we show that corporate share repurchases have a significant adverse effect on liquidity as measuredby bid–ask spread or depth. Our results also indicate that share repurchases largely reflect contrariantrading rather than managerial timing ability.
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