Journal of Banking & Finance Vol. 37 No. 3 2013
Investor protection and cash holdings: Evidence from US cross-listing
Abstract
[This paper develops and tests a new theoretical explanation for stock repurchases. Investors may disagree with the manager about the firm's investment projects. A repurchase causes a change in the investor base as investors who are most likely to disagree with the manager tender their shares. Therefore, a firm is more likely to buy back shares when the level of investor-management agreement is lower, and agreement improves as a consequence. Moreover, dispersion of opinion among investors cannot explain repurchase activity once the stock price and investor-management agreement are controlled for. Overall, the evidence is consistent with firms strategically using repurchases to improve alignment between management and shareholders.]
- DOI
- 10.1016/j.jbankfin.2012.10.021
- Volume
- 37
- Issue
- 3
- Pages
- 937-951
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref