Abstract
We examine stock repurchases in Korea. Korea allows unique mechanisms, stock stabilization funds. Our results indicate that these funds are treated by the market as a weak form of repurchase. Firms in Korea that announce open market repurchases repurchase 90% of the announced shares within 3 months. This compares to a smaller percentage in 3 or more years in the United States. The market response in Korea to a repurchase announcement is similar to the United States. Tests of the determinants of the market response to announcements indicate a positive relation between ownership concentration and the market response.
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