The Impact Of New Repurchase Regulations On The Response Of China’s Stock Repurchase Market

Share repurchase refers to the use of funds raised by various channels by listed companies to buy back their own shares,which is mainly divided into two ways:public and non-public repurchase.The use of repurchase by listed companies can achieve the company’s market value management,improve the company’s capital structure,reverse takeover and strengthen control,etc.,which is one of the commonly used capital operation methods of listed companies.The revised Company Law,which came into effect at the end of October 2018,simplified the buyback process and strengthened the management of the quality of information disclosure,in addition to the prototype of the treasury share system.Since the revision of the Company Law,the number and scale of stock repurchase events in China have increased significantly,thereby increasing the research sample of stock repurchase,and at the same time,the revision of the stock repurchase system has also provided a new perspective for the research on the factors affecting the shortterm abnormal rate of return of stock repurchase.So,will the 2018 amendments to the Company Law enhance or weaken the announcement effect of share buybacks?What factors affect this role?This paper selects listed companies that issued repurchase plans from 2017 to2021 as a sample,uses the event analysis method to first test the short-term market response of the sample population,and then analyzes the impact of the new stock regulations on the market response of stock repurchase announcements,and further examines whether there are differences in their impact in different samples.From the test results,stock repurchase will bring positive market reaction,and there is no obvious information leakage before the announcement,which shows that China’s securities market is more open and transparent,and insider trading is also decreasing.The promulgation of the new buyback rules has weakened the market response to share repurchases,and this effect is more pronounced in the high-equity pledge group,which shows that the new buyback rules further simplify the share repurchase decision-making and implementation process,making the company’s operation more flexible.However,for companies with high dividend payments,their share repurchase announcements can still bring positive market reactions,possibly because cash dividends send a good signal,investors prefer this type of company,and the weakening effect of the new repurchase rules on the announcement of stock repurchase plans has been weakened.This paper is mainly divided into six chapters: the first chapter is the introduction to this paper,which covers the research background and research significance of this paper.The second chapter is a literature review of this paper,which elaborates on the relevant theory of stock buyback,market reaction and influencing factors of market reaction.The third chapter is the research assumptions and model design of this paper,based on the relevant theory of stock buyback,this paper proposes four assumptions.The fourth chapter is an empirical analysis of this paper,which verifies the hypothesis proposed earlier in this paper by analyzing the regression results obtained by the multiple regression model.Chapter 5 is the robustness test of this paper,and the robustness test of the empirical results of this paper is carried out by replacing the explanatory variables and the PSM propensity score matching model.Chapter 6 is the conclusion and recommendations of this paper.This paper selects the latest stock repurchase data as a sample to study the impact of the revision of the Company Law on the announcement effect of share repurchase,and enriches the research on the market reaction of stock repurchase,especially the impact of policy changes on it.