Impact of share buybacks on liquidity and profitability

Summary The purpose of the thesis is to understand the behavior of companies listed on the Paris stock exchange that buy back their own shares and of liquidity contracts, by studying the impact of their operations on market liquidity and on the profitability of shares. More specifically, the thesis deals with three issues: (i) the motivations of companies to buy back their own shares, (ii) the effectiveness of liquidity contracts with respect to the objectives assigned to them, and (iii) the consideration of market liquidity and share profitability in the decision-making process (ex ante) and the impact of these decisions on liquidity and profitability (ex post). In the first two parts of the thesis, the asymmetric information and price support hypotheses are favored to explain the observed buyback behavior. In the third part, the behavior of liquidity contracts is examined from the perspective of the liquidity they provide to the market.