The Impact Of Economic Policy Uncertainty On The Effect Of Stock Repurchase Announcements

Stock repurchase is one of the important means for listed companies to carry out capital operation and value distribution.Scholars’ research on stock repurchase has gradually expanded from the initial market effect to influencing factors and economic consequences.However,previous studies mostly explained from the perspective of traditional corporate financial data,often ignoring market factors.In recent years,the most popular research on market factors is economic policy uncertainty.A large number of scholars have studied its relationship with the stock market,but no domestic scholars have linked it with stock repurchase.Based on the stock repurchase data of Chinese listed companies from 2011 to2020,this paper studies the impact of economic policy uncertainty on the announcement effect of stock repurchase.First,this paper verifies whether stock repurchase has a significant short-term positive announcement effect,and the answer is yes.Second,on this basis,this paper studies the relationship between economic policy uncertainty and the short-term announcement effect of stock repurchase.The results show that in the Chinese market,the uncertainty of economic policy,especially monetary and fiscal policy,is significantly negatively correlated with the short-term market effect of stock repurchase.In addition,there is a significant negative impact on market value management and other repurchase purposes;Enterprises with low management shareholding ratio and poor external information quality are significantly negatively affected;Both state-owned enterprises and non-state-owned enterprises are significantly negatively affected,but state-owned enterprises are more negatively affected.Thirdly,based on the academic research on the impact of CEO Characteristics on stock repurchase,this paper concludes that CEO age and academic experience will inhibit the negative impact of policy uncertainty on the short-term announcement effect of stock repurchase.Fourth,this paper examines whether listed companies use the means of regulating the repurchase ratio to hedge the negative impact of the short-term announcement effect of stock repurchase caused by economic policy uncertainty.The result is positive.And in the impact of economic policy uncertainty on the proportion of shares to be repurchased,investor sentiment plays an intermediary role and external information quality plays a regulatory role.Fifthly,this paper further studies the impact of economic policy uncertainty on long-term market effect,and finds that they are significantly negatively correlated,and enterprise risk-taking plays a partial intermediary role.The innovations of this paper are as follows.Firstly,the topic of this paper studies the blank field of domestic scholars,that is,the impact of China’s economic policy uncertainty on stock repurchase.Secondly,the conclusion of this paper creatively enriches the timing of stock repurchase,that is,listed companies should publish the announcement of stock repurchase when the uncertainty index of economic policy is low,and choose to publish the information for the purpose of market value management in the announcement to increase the proportion of stock repurchase.