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Conference Paper: Real Effects of Share Repurchases Legalization on Corporate Behaviors
| Title | Real Effects of Share Repurchases Legalization on Corporate Behaviors |
|---|---|
| Authors | |
| Issue Date | 2022 |
| Citation | European Financial Management Association 2019 Annual Meetings, Ponta Delgada, Island of S. Miguel, Portugal, June 26-29, 2019 How to Cite? |
| Abstract | We use staggered share repurchases legalization from 1985 to 2010 across the world to examine its impact on corporate behaviors. We find that share-repurchasing firms do not cut dividends as a substitution. The cash for repurchasing shares comes more from internal cash than external debt issuance, leading to reductions in capital expenditures and R&D expenses. While this strategy boosts stock prices, it results in lower long-run Tobin's Q, profitability, growth, and innovation, accompanied by lower insider ownership. Tax benefits and paying out temporary earnings are two primary reasons that firms repurchase. |
| Persistent Identifier | http://hdl.handle.net/10722/316939 |
| DC Field | Value | Language |
|---|---|---|
| dc.contributor.author | Wang, Z | - |
| dc.contributor.author | Yin, Q | - |
| dc.contributor.author | Yu, L | - |
| dc.date.accessioned | 2022-09-16T07:25:59Z | - |
| dc.date.available | 2022-09-16T07:25:59Z | - |
| dc.date.issued | 2022 | - |
| dc.identifier.citation | European Financial Management Association 2019 Annual Meetings, Ponta Delgada, Island of S. Miguel, Portugal, June 26-29, 2019 | - |
| dc.identifier.uri | http://hdl.handle.net/10722/316939 | - |
| dc.description.abstract | We use staggered share repurchases legalization from 1985 to 2010 across the world to examine its impact on corporate behaviors. We find that share-repurchasing firms do not cut dividends as a substitution. The cash for repurchasing shares comes more from internal cash than external debt issuance, leading to reductions in capital expenditures and R&D expenses. While this strategy boosts stock prices, it results in lower long-run Tobin's Q, profitability, growth, and innovation, accompanied by lower insider ownership. Tax benefits and paying out temporary earnings are two primary reasons that firms repurchase. | - |
| dc.language | eng | - |
| dc.title | Real Effects of Share Repurchases Legalization on Corporate Behaviors | - |
| dc.type | Conference_Paper | - |
| dc.identifier.email | Wang, Z: wangzg@hku.hk | - |
| dc.identifier.authority | Wang, Z=rp02039 | - |
| dc.identifier.hkuros | 336492 | - |