Business operating performance of Vietnamese enterprises following open market share repurchase announcements

Abstract

The paper examines the impact on business operating performance of Vietnamese enterprises following open market share repurchase announcements in the period of 2010-2017. The empirical results from regression models including Fixed Effect, Random Effect, Hausman test and 2-step Heckman show that open market share repurchase announcements bring positive effects to business operating performance through potential future profits (Tobin’s Q index). However, the paper has found no evidence that ROA or ROE indicators will change after share repurchase announcements. In addition, the paper also points out the correlation relationship between firm size, profitability and financial leverage with business performance of enterprises in Vietnam.