Market Reactions to Share Repurchase Announcements : The Role of Family- and Founder-Controlled Ownership in Sweden

Sammanfattning

This study examines whether ownership structure influences market reactions to share repurchase announcements in the Swedish equity market. Using an event study methodology, cumulative abnormal returns (CAR) are measured around repurchase announcements for firms listed on Nasdaq Stockholm over 2015–2025. Drawing on signalling and agency theory, the study argues that the credibility of a repurchase announcement may vary systematically with ownership structure in concentrated-ownership environments such as Sweden. The results indicate that family- and founder-controlled firms experience 2.7 percentage points higher cumulative abnormal returns in the short event window (−1, +1) than firms with dispersed ownership, with the difference significant at the 10% level and robust across alternative specifications. No significant relationship is found in the extended event window (−5, +5), consistent with semi-strong market efficiency. The findings are more supportive of signalling-based than agency-based explanations, suggesting that markets perceive repurchase announcements from family- and founder-controlled firms as more credible signals of undervaluation. This study contributes to the literature by showing that ownership structure influences how markets interpret repurchase announcements in Sweden with a concentrated-ownership environment.