The Research Of Listed Companies’ Share Repurchases Behavior Based On Long-term Market Effect Analysis

As an important means of capital operation in the capital market, share repurchase notonly can optimize the capital structure, but also can pass the signal that the company’s shareprice may be underestimated and the future operations of the company will be much better tothe external so that to enhance the stock price. Today, the share repurchase plays anincreasingly important role in the western developed capital markets. In recent years, theshare repurchase gets more and more concern and attention in our country. Many scholarsconducted more detailed studies of share repurchase behaviors from various angles of thelegal system, motivation, financial effects and short-term market effects on listed companiesin China, including theoretical research and empirical research. However, the research fromthe long-term market effects analysis point to investigate the behavior of share repurchase israre.Therefore, this article chooses from the long-term market effects analysis to conduct adeep study on the share repurchase behavior of listed companies in China. This paper ismainly to solve two questions as follows:(1) Whether share repurchase of the target company will affect its long share price?(2) Whether the target company’s long-term share price can reflect the target companyshare repurchase information?The main line of this article are as follows: Based on signaling theory, it is the first timeto use the more popular long-term event study methodology abroad, to make empiricalvalidation of long-term market effects on the repurchase of shares of listed companies inChina. Then on the basis of the empirical conclusions, combined with effective market theory,it will make further analysis of the problems in the repurchase of shares of listed companies inChina and come up with the corresponding countermeasures. The main conclusions are asfollows:(1) China’s listed companies repurchase announcements have a positive long-termmarket effect. The conclusions show that the repurchase of shares in China should have gotmore attention. However, the share repurchase practice in China’s listed companies is notparticularly frequent, which is because of many restrictions on relevant laws and regulations of share repurchases. To this end, we need to provide a permissive legal environment suitablefor the development of the share repurchase.(2) It shows that excess returns happened before the repurchase announcement, whichtells us that the share repurchase announcement might be leaked in China’s listed companies.It also tells us that China’s securities market has not yet reached the weak form efficiency. Tothis end, we need to strengthen information disclosure regulation, to reduce the possibility ofinsider trading, but also protects the interests of various stakeholders.(3) The laxation of market supervision and the weak-validity of the market will lead to anumber of other issues. Mainly as follows: The first part is the fable stocks repurchase notice.The second part is the difficulty to protect the interest of minority shareholders. The third partis the difficult to protect the interest of creditors. To this end, we need to implement from allaspects, so that we can make the all-round protection of the interests.