Investor Recognition and the Long-Run Performance of Repurchases

• Theory suggests that firms with lower investor recognition should provide investors with higher returns. Using U.S. data we document a strong negative relationship between changes in investor recognition and asset returns. We demonstrate that investor recognition is a priced factor in asset returns different from the traditional ones. Undertaking a repurchase significantly reduces the firm's investor recognition. Accounting for changes in investor recognition reduces the abnornlal performance of firms undertaking a repurchase by 1.4% over one year.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Business Administration (hsv//eng)

Publication and Content Type

ovr (subject category)

vet (subject category)