This paper studies the payout policy of Italian firms controlled by large majority shareholders (controlled firms). The paper reports that a firm's share of dividends in total payout (dividends plus repurchases) is negatively related to the size of the cash flow stake of the firm's controlling...

This study examines the impact of minority shareholder protection on the signaling effect of open-market share repurchases, the post-repurchase operating performance, and the subsequent investment decisions. When controlling owners retain tight control of their firms by insufficient equity...

Investor-driven "short-termism" is said to harm EU public firms' ability to invest for the long term, prompting calls for the EU to better insulate managers from shareholder pressure. But the evidence offered---rising levels of repurchases and dividends---is incomplete and misleading: it ignores...

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...

Most financial professionals recognize that share repurchases, all other things equal, should increase a firm's stock price and earnings per share. Our goal is to provide financial executives, investment analysts, and shareholders with a practical understanding of the accounting and financial...

We analyze how the introduction of repurchases in 1998, and a major tax reform in 2001, affected the payout policy of German firms. To this end, we estimate Lintner (1956) partial adjustment models for both dividends and total payouts. We also analyze the implications for payout of changes in...

Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them, the people running large public corporations say that they are maximizing something else entirely: earnings per share (EPS). Perhaps this is a mistake. No matter. We take...