Munich Personal RePEc Archive

EU regulation and open market share repurchases: New evidence

Drousia, Angeliki and Episcopos, Athanasios and Leledakis, George N. and Pyrgiotakis, Emmanuil (2020): EU regulation and open market share repurchases: New evidence.


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This paper re-examines the impact of the EU Market Abuse Directive (MAD) on the market reaction around share repurchase announcements. We use a unique hand-collected dataset of firms listed on the Athens Stock Exchange, and we find evidence that contrasts with previous conclusions for large European economies. The implementation of MAD is followed by a significant improvement in announcement abnormal returns, an improvement which remains even when we control for several firm-specific factors, industry fixed effects, and potential endogeneity issues. We attribute our findings to cross-country differences in institutional framework and pre-MAD existing national laws. Collectively, our results support the notion that EU directives do not have a uniform effect across Member States. Thus, the impact of such reforms should also be examined in individual capital market studies.

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