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Contemporary Accounting Research Vol. 41 No. 2 2024

Voluntary disclosures regarding open market repurchase programs

Leonce Bargeron1; Alice A. Bonaimé2; William Docimo3; Mei Feng4; Shawn Thomas4

1 Gatton College of Business University of Kentucky Lexington Kentucky USA · 2 Eller College of Management University of Arizona Tucson Arizona USA · 3 University of Connecticut School of Business Storrs Connecticut USA · 4 Katz Graduate School of Business University of Pittsburgh Pittsburgh Pennsylvania USA

open access

Abstract

This paper studies voluntary disclosures that firms have suspended, resumed, or completed their open market repurchase programs. Voluntary disclosures of repurchase status updates are common and value‐relevant. They also inform subsequent repurchase activities: voluntary disclosers are more likely to complete their repurchase programs and to initiate new repurchase programs than firms with undisclosed repurchase status changes. Moreover, firms that disclose repurchase suspensions experience larger returns to subsequent repurchase authorizations, consistent with a reward for establishing a reputation for transparency via voluntary bad news disclosure. Finally, exploiting a change in repurchase reporting requirements, we document that voluntary updates are less frequent when mandatory disclosure increases. An important exception, however, is when macroeconomic uncertainty is high, such as during the Great Recession and the COVID‐19 pandemic.

DOI
10.1111/1911-3846.12937
Volume
41
Issue
2
Pages
1151-1185
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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