An application of multicriteria decision aid models in the prediction of open market share repurchases

Andriosopoulos, Dimitris and Gaganis, Chrysovalantis and Pasiouras, Fotios and Zopounidis, Constantin (2012) An application of multicriteria decision aid models in the prediction of open market share repurchases. Omega, 40 (6). pp. 882-890. ISSN 0305-0483 (https://doi.org/10.1016/j.omega.2012.01.009)

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Abstract

This study presents the first attempt to develop classification models for the prediction of share repurchase announcements using multicriteria decision aid (MCDA) techniques. We use three samples consisting of 434 UK firms, 330 French firms, and 296 German firms, to develop country-specific models. The MCDA techniques that are applied for the development of the models are the UTilités Additives DIScriminantes (UTADIS) and the ELimination and Choice Expressing REality (ELECTRE) TRI. We adopt a 10-fold cross validation approach, a re-sampling technique that allows us to split the datasets in training and validation sub-samples. Thus, at the first stage of the analysis the aim is the development of a model capable of reproducing the classification of the firms considered in the training samples. Once this stage is completed, the model can be used for the classification of new firms not included in the training samples (i.e. validation stage). The results show that both MCDA models achieve quite satisfactory classification accuracies in the validation sample and they outperform both logistic regression and chance predictions. The developed models could provide the basis for a decision tool for various stakeholders such as managers, shareholders, and investment analysts.

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• Item metadata

  Item type:	Article
  ID code:	46672
  Dates:	Date Event December 2012 Published 2 February 2012 Published Online
  Notes:	NOTICE: This is the author's version of a work that was accepted for publication in Omega. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Omega, Vol.40 Iss.6 2012, DOI: 10.1016/j.omega.2012.01.009.
  Subjects:	Social Sciences > Commerce > Accounting
  Department:	Strathclyde Business School > Accounting and Finance
  Depositing user:	Pure Administrator
  Date deposited:	13 Feb 2014 16:41
  Last modified:	19 Apr 2024 00:14
  Related URLs:	Journal or Publication
  URI:	https://strathprints.strath.ac.uk/id/eprint/46672