Real effects of share repurchases legalization on corporate behaviors

Corporate payout, cash holdings, and the COVID-19 crisis: Evidence from the G-7 countries

“…Share repurchases tend to be more flexible and are often considered a substitute for dividends ( DeAngelo and DeAngelo, 1990 ; Grullon and Michaley, 2002; Brav et al, 2005 ). In recent years, firms in the U.S. have distributed more cash via share repurchases than dividends, and in many other countries share repurchases have gradually grown after regulatory restrictions were eased ( Lee and Suh, 2011 ; Floyd et al, 2015 ; Wang et al, 2021 ). Hence, a comprehensive analysis of COVID impacts on payout policy requires us to examine both dividends and share repurchases.…”

Policy uncertainty and corporate investment: public versus private firms

“…Although we rely on the classic corporate finance literature to select firm-level control variables (e.g., Mortal and Reisel 2013;Foucault and Fresard 2014), we recognize that our list of controls is not exhaustive. For example, prior empirical studies find that a firm's payout policy influences its investment behavior (Almeida et al 2016;Wang et al 2021) while being significantly correlated with Baker et al's (2016) EPU index (Smietanka et al 2018;Pirgaip and Dinçergök 2019;Attig et al 2021;Anolick et al 2021). Unfortunately, information about private companies' payout policies is not available.…”

The persistence and consequences of share repurchases

“…(2020) posit that many recent repurchases in the United States are not motivated by undervaluation after documenting evidence that long‐term abnormal returns following repurchase announcements have dropped significantly in recent years. On the other hand, a host of studies document that undervaluation could be a motive for repurchases among non‐US firms (Manconi, Peyer, & Vermaelen, 2019; Anolick, Batten, Kinatener, & Wagner, 2021; Wang, Yin, & Yu, 2021). These studies provide evidence that repurchases are followed by positive long‐term shareholder returns.…”