Activist investors and open market share repurchases

Autore, Don M.; Clarke, Nicholas; Liu, Baixiao

doi:10.1016/j.jbankfin.2019.105614

Cited by 19 publications

(9 citation statements)

References 49 publications

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“…Other studies in this area have focused on the interests of investors from different time horizons, including short-term and long-term investors (see e.g., Gasper et al, 2013;Autore et al, 2019;Ghaly et al, 2020). However, little attention is paid to all stakeholders' perspectives with long-term and more strategic objectives (see Freeman, 1984;Buono and Nichols, 1990).…”

Section: The Literature Reviewmentioning

confidence: 99%

“…Share buybacks provide a unique type of corporate distribution of cash as they allow firms to repurchase shares from shareholders at a flexible price and time, especially when they have a cash surplus. Shareholders retain the option of whether they sell their shares or not (Autore et al, 2019). Share buybacks have gained more popularity in the UK since 2004 (Renneboog and Trojanowski, 2011;Dedman et al, 2014) Prior studies have mainly examined market reactions of share buybacks: managers' motivations for share buybacks and their impact on firm optimal capital structure (Stonham, 2002;Brav et al, 2005); capital market reactions to the announcement of share buybacks (Rau and Vermaelen, 2002;Oswald and Young, 2008); and firms' characteristics in share buyback practices (Andriosopoulos and Hoque, 2013).…”

Section: Introductionmentioning

confidence: 99%

“…This literature suggests that firms use rational decisions to arrive at market-based financial solutions when faced with share buyback decisions. Overall, it shows that corporate pay-out policies are heavily influenced by the pressures of activist investors (see e.g., Gasper et al, 2013;Autore et al, 2019;Ghaly et al, 2020;Gryglewicz et al, 2020;Karpoff, 2021).…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Assessing the impact of market logic and long-term strategic plans of top management in share buyback decisions

Demirag

Kungwal

Bakkar

2021

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PurposeThis paper investigates stakeholders' perspectives of share buybacks in the context of time-horizons of investment decisions and strategy.Design/methodology/approachWe use in-depth interviews with stakeholders from eight listed UK firms as well as examine their publicly available data.FindingsFindings suggest that share buybacks involve a wide range of stakeholders' rational interests and long-term management perspectives as they enable firms to strategise operational plans towards their long-term corporate goals.Research limitations/implicationsThe findings are based on interviews with a small number of share buyback firms and the findings, therefore, may not be generalised to all firms.Practical implicationsThe results show that share buybacks may be part of the long-term interests of firms and not necessarily used as part of short-term EPS increases as suggested in the extant literature.Originality/valueThe findings contribute to the literature on corporate pay-out policies in the context of short-term financial objectives vs long-term strategic objectives of stakeholders. They show that share buybacks can be an important part of firms' long-term strategic considerations.

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Section: The Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Assessing the impact of market logic and long-term strategic plans of top management in share buyback decisions

Demirag

Kungwal

Bakkar

2021

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“…A concentração de propriedade de investidores institucionais (Inst) é obtida pela razão entre ações nas mãos de investidores institucionais e a quantidade total de ações da empresa em um determinado ano (Martínez-Ferrero e Lozano 2021; Chen et al 2020). A concentração de propriedade de investidores ativistas (Ativ) é a razão entre o número de ações nas mãos de investidores ativistas e a quantidade de ações da empresa em um determinado ano (Autore et al, 2019;Shi et al, 2019). Estes dados foram obtidos na base Capital IQ.…”

Section: Definição Das Variáveis Dependentes Independentes E De Controleunclassified

Estrutura De Propriedade E Mitigação Das Emissões De Gases Do Efeito Estufa

Vasconcelos

Abreu

Crisóstomo

et al. 2020

RGSA

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Esse trabalho investiga o impacto da estrutura de propriedade nas decisões que afetam a mitigação de emissões de gases do efeito estufa (GEE). Esta pesquisa tem como base a teoria da agência e assume a hipótese de que a adoção de estratégias climáticas corporativas é influenciada pela estrutura de propriedade da empresa. Foram analisadas empresas brasileiras de capital aberto que realizaram seu inventário de emissão de GEE entre os anos de 2010 e 2018. Realizou-se análise descritiva e foram processadas estimações por dados em painel de efeitos aleatórios e, como variável dependente, utilizou-se o logaritmo natural da razão entre emissões de GEE e receita bruta. Resultados econométricos indicam que um maior percentual de ações nas mãos de investidores institucionais favorece a redução de emissões de GEE. No caso de propriedade de ações da empresa nas mãos de diretores executivos e de investidores ativistas, não foi identificada uma relação significante com a redução de emissões de GEE. A pesquisa reforça a importância de tipos de estrutura de propriedade em decisões que proporcionam incentivos para enfrentar o aquecimento global.

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Operating performance and long‐run stock returns following share repurchase: Evidence from an emerging market

Wang

Nguyen

Dinh

2020

J Corp Accounting Finance

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This study examines the long‐term abnormal returns and operating performance following share repurchase announcements by Vietnamese listed firms. Applying matched control samples based on industry, exchange listing, size plus book‐to‐market, and pre‐event operating performance, we document significantly higher post‐repurchase buy‐and‐hold abnormal returns over the one‐year window. The outperformance becomes insignificant for most control samples with a longer horizon of 2 years after controlling for common pricing factors. Regarding operating performance, our results show improvement for repurchasing firms in the fiscal year concurrent with the repurchase announcements when we adopt the control sample based on pre‐event performance, but we do not find significant differences for the subsequent fiscal year. Examining the relation between the dual phenomena, we find some evidence of positive association in that firms with better post‐repurchase performance tend to have higher post‐event abnormal returns. This relation is stronger for firms with higher completion rates, consistent with the notion that actual repurchase is a stronger and more credible signal to the market.

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Activist investors and open market share repurchases

Cited by 19 publications

References 49 publications

Assessing the impact of market logic and long-term strategic plans of top management in share buyback decisions

Assessing the impact of market logic and long-term strategic plans of top management in share buyback decisions

Estrutura De Propriedade E Mitigação Das Emissões De Gases Do Efeito Estufa

Operating performance and long‐run stock returns following share repurchase: Evidence from an emerging market

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