Pay Geri Alım Programlarında Firma Büyüklüğü Etkisi: Borsa İstanbul Üzerine Bir Uygulama
Firm Size Effect on Share Repurchase Programs: An Application on Borsa İstanbul

Summary/Abstract: Purpose – In the study, it is aimed to test whether the 74 announcements made by the companies traded on Borsa Istanbul to the Public Disclosure Platform regarding the start of a share repurchase program between 2018-2021 affect the share returns and whether the stock market is effective in a semi-strong form. In addition, it is also aimed to analyze the reactions given to share buyback programs by taking into account the asset size of the companies. Design/Methodology/Approach – The study is based on the Efficient Markets Hypothesis and the event study method is adopted. In this study, 4 years covering the years 2018-2021 (which is the period after 2011, when share buyback permissions were granted to listed companies) are included in the analysis and the day of the share buyback program notification for each company (t0) is determined as the event day. Within the scope of the event study, the event window (t-20, t+20) is determined as 41 working days, and the forecast window is 101 working days in between (t-20, t-120). In the study, the market model is used as a forecasting model, and the return of the BIST 100 Index is used to measure the market return, and the share return of each company is used for the share returns of the companies. Findings – The findings reveal that positive abnormal returns can be obtained in the event window. As a result of the research, it is observed that the share repurchase program announcements affect Borsa İstanbul Stock Market and the stock market is not efficient in the semi-strong form in the given period. In addition, it is found that the abnormal return obtained as a result of the announcements made by small firms is significant at the 5% and 10% significance levels. Discussion – In this study, it is determined that Borsa İstanbul stock market does not operate effectively in semi-strong form according to the Efficient Markets Hypothesis. Therefore, it is observed that information about share repurchase programs is not reflected on share prices quickly and investors have the possibility of obtaining abnormal returns by using this information. In addition, the effect of share repurchase program announcements on share prices is compared by distinguishing between small and large companies.

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