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The impact of internal and external factors on the relationship between information opacity and open‐market repurchases
Author(s) -
Wang ChihWei,
Peng JingYu
Publication year - 2021
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12727
Subject(s) - opacity , corporate governance , business , quality (philosophy) , linkage (software) , monetary economics , information quality , accounting , economics , finance , information system , philosophy , biochemistry , physics , chemistry , electrical engineering , epistemology , optics , gene , engineering
This study investigates the linkage between information opacity and open‐market share repurchases in emerging markets. We measure information opacity by accruals quality and find that firms with higher levels of information opacity experience more positive market reactions following repurchase announcements, which remain after controlling for some firm characteristics. We document that information opacity is positively related to announcement returns only in firms with strong corporate governance, controlled by a single family, or with a low level of foreign ownership. Our results reveal that the positive relationship between information opacity and announcement returns still exists even during the global financial crisis.