We examine the key drivers behind management decisions on share repurchase from various theoretical perspectives, including the free cash flow theory and the signaling theory/hypothesis. Specifically, we investigate the relationship between share repurchase and three key drivers: surplus cash,...

This paper examines whether share repurchase announcements are signals of undervaluation or insiders’ opportunistic activities by investigating insider trading patterns surrounding buyback announcements in Vietnam. Consistent with the insider opportunism hypothesis, we show that insiders are...

Purpose: The purpose of this report was to assess the relationship among the cash dividend payout and share repurchase, through essential cash distribution methods adopted by Vietnamese publicly listed companies. The complementary along with substitute relationship from these financial practices...

Purpose: The purpose of this report was to assess the relationship among the cash dividend payout and share repurchase, through essential cash distribution methods adopted by Vietnamese publicly listed companies. The complementary along with substitute relationship from these financial practices...

"This study examined the relationship between share repurchases and corporate sustainability in South Africa during 2011-2019. According to stakeholder theory, companies may feel a sense of obligation to not only distribute returns to shareholders through share repurchases but also to other...

We empirically advocate for UK regulators to increase the volume limit of 15% outstanding shares on open market repurchases. Our main framework initially tests the determinants of share repurchases based on their size, Small, Medium and Large. The findings reveal that consistent with extant...

This study examines whether the use of tax haven subsidiaries by U.S. multinational corporations (MNCs) is associated with more intense use of share buybacks and with improvement in management's ability to generating revenues. I find that MNCs' more intensive tax haven subsidiary use is...

This paper presents a novel study on the significance of corporate payout policy in shaping firms' financial decision-making and, in turn, the macroeconomy. To this end, we add to the literature by allowing households and firms to choose share buybacks optimally. We then explore the implications...

Stock repurchases of banks have become an increasingly popular instrument of banks' payout policies after the Great Financial Crisis. Recent empirical evidence documents that stock repurchases are particularly popular among global systemically important banks that tolerate relatively high levels...

This study shows that payout policy depends on the market expectation of the repurchase completion rate, within the context of the free cash flow hypothesis. Our model formulates that the amount of agency costs that are unlikely to be reduced discounts the share price at the announcement of...

Research AbstractThis study analyzes the association between income shifting incentives and share repurchases using a hand-collected sample of U.S. multinational corporations (MNCs) from 2006 to 2020. We find a significant negative association between income shifting and share repurchases....

Securities regulation must balance the dual objectives of mitigating market abuse and permitting issuers to manage their capital flexibly and efficiently. This paper examines this issue in the specific context of the regulation of share buybacks within the insider dealing framework in a...

In this article, we examine dividends and share repurchases of S&P 1500 firms during the COVID-19 crisis characterized by the stock market crash and a relatively quick stock price recovery propelled by technology stocks. We find that the great majority of firms either maintain or increase the...

This study shows that payout policy depends on the market expectation of the repurchase completion rate, within the context of the free cash flow hypothesis. Our model formulates that the amount of agency costs that are unlikely to be reduced discounts the share price at the announcement of...

Our study examines the impact of the Inflation Reduction Act (IRA) on shareholder wealth and corporate agency costs. The IRA, signed into law on August 16, 2022, represents the first time in U.S. history that stock repurchases became subject to excise taxes. The stated goal of this new tax was...

It is widely believed that undervaluation is an important determinant of share repurchases. However, empirical evidence on undervaluation remains mixed. This paper considers a novel measure of undervaluation that relies on the difference between management earnings forecasts and the...

Share buybacks are in many respects a socially desirable financial technique, and the tremendous majority of these operations is surrounded by adequate safeguards preventing any risk of improper implementation. Yet share buybacks may, in some circumstances, reflect market manipulation practices,...

This paper examines CEO behavior in response to within-firm pay inequality. Using CEO-median employee pay ratio data mandated by the SEC, the study reveals that following the release of pay ratio disclosures, CEOs with higher pay ratios tend to issue higher dividend payments as a strategy to...

The discount control mechanisms that closed-end funds often choose to adopt before IPO are supposedly implemented to narrow the difference between share price and net asset value, We find evidence that non-discretionary discount control mechanisms such as mandatory continuation votes serve as...

The purpose of this study was to examine the determinants of cash distribution options by critically considering the effects of earnings, dividends, firm size, and economic value added. The distribution of cash dividends to shareholders serves as a basic means by which shareholders receive...

Share buybacks have become a popular way for companies to return capital to shareholders. However, there is an ongoing debate regarding the impact of share buybacks on the performance and shareholder value. This paper starts by examining the literature on share buybacks and aims at testing the...

We develop policy gradients methods for stochastic control with exit time in a model-free setting. We propose two types of algorithms for learning either directly the optimal policy or by learning alternately the value function (critic) and the optimal control (actor). The use of randomized...

We present evidence that share repurchases reduce investment inefficiencies related to short-term investors. Using U.S. data from 1988 to 2018, we first document that stock buybacks are associated with lower long-term investments. However, contrary to popular perception that buybacks sacrifice...

Our study examines whether share repurchases lead to reductions in real investments. Repurchase opponents argue that managers forego value-enhancing investments to conduct opportunistic repurchases, while proponents argue that repurchases return excess cash to shareholders who then reinvest it...

How do share repurchases affect dividends' information implications? I show in fifteen international markets that firms increasingly smooth dividends following the legalization of share repurchases. This implies that repurchases enable managers to effectively dispose of temporary cash flows and...