The Harvard Law School On Stock Buybacks Around The World

During August 2014, Alberto Manconi, Urs Peyer, and Theo Vermaelen published a working paper on the effects stock buybacks have on performance.

This paper displays evidence, which supports the conclusion that outside the US, short-term returns around share repurchase announcements are positive, although only about half the size as in the US.

However, long-run abnormal returns after buyback announcements follow the same pattern in non-US firms as documented by prior literature for US firms, which is puzzling. Nevertheless, the paper discovered evidence which supported the conclusion that cross-country differences in corporate governance quality and regulatory differences can explain variation in the short- and long-run abnormal returns.