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This study aims to examine the influence of ownership structure and board composition on the probability and intensity of stock repurchases. The study’s sample comprises 3,744 firm-year observations, consisting of 53 repurchasing firms with 96 firm-year observations from 2008 to 2019.

Probit and fixed-effects regression models are used to obtain empirical results. Moreover, a probit model with a continuous endogenous regressor (IV-probit) and an instrumental variable method with two-stage least squares (IV-2SLS) estimation are used to address endogeneity.

Corporations with high family or state ownership tend to inhibit stock repurchases to hoard excess free cash flow, supporting agency theory. Conversely, firms with high board independence tend to repurchase their stocks at least once to distribute free cash flows to shareholders, confirming agency theory. Nonetheless, corporations with more female directors on the board or CEO duality tend to conduct stock repurchases at least once but do not repurchase stocks with high values. Interestingly, more female directors on the board may send false signals about undervalued stocks.

This is the first study to reveal that firms with CEO duality repurchase their stocks at least once but avoid repurchasing shares with high values. It is also the first study to explore whether women on a board may cause false signaling about undervalued stocks. Furthermore, this study reveals that family and state ownership are potential determinants of stock repurchases in countries with high ownership concentration. This is the first study to address this issue in Thailand.

Share repurchase programs are the most important form of payout, yet the implications of incomplete share repurchase programs have not been examined in previous literature. This study tests whether incomplete share repurchase programs are seen as a positive or as a negative signal by investors.

The perception of incomplete share repurchase programs by algorithmic traders, institutional investors and analysts is analyzed with structural equation models, seemingly unrelated regressions, propensity score matching and buy-and-hold abnormal returns on data from share repurchase programs in the United States. In contrast to previous literature, algorithmic trading is appropriately estimated as a latent variable, leading to more reliable results. Furthermore, decisions about share repurchases and dividends are appropriately modeled simultaneously and iteratively, based on findings from previous literature.

The results show that sophisticated investors such as algorithmic traders, institutional investors and financial analysts avoid incomplete share repurchase programs over a long-term investment horizon. Thus, incomplete share repurchase programs are interpreted as negative signals. Additional analyses reveal that share repurchase programs are not completed due to insufficient cash flow, as a result of financial difficulties. Overall, this implies that financial managers should be careful to announce share repurchase programs they know cannot be completed, similar to dividends that cannot be maintained over a long-term horizon.

This study is the first to consider incomplete share repurchase programs. The findings are of interest to scholars and practitioners, as this study goes beyond narrow repurchase program announcement windows, and instead focuses on the longer-term investment horizon over the life of the share repurchase program, which is often ignored in prior research.

The theoretical basis for the case is information asymmetry and signaling theory, with buybacks providing a mechanism for reducing information asymmetry between management and investors. The controversy surrounding buybacks has led to political and regulatory scrutiny, which, consistent with evidence from academic research, may affect corporate behavior.

The compact case is based on secondary, public information about stock buybacks. All sources used are cited in-text, with full citations included in the references section at the end of the teaching note.

Stock buybacks, a means of providing returns to shareholders, have recently received increased scrutiny by politicians, media and shareholder activists. Proponents have argued that buybacks result in efficient allocation of capital by returning funds to shareholders, whereas opponents have criticized buybacks for enriching executives, providing tax advantages to shareholders and contributing to income inequality. Corporations did not curtail their use of buybacks after the Inflation Reduction Act of 2022 imposed an excise tax. The case frames the buyback debate in current events and focuses on the buyback activity of Apple. The case provides students the opportunity to analyze alternative ways that companies can provide returns to shareholders, evaluate impacts of buybacks on corporate stakeholders and appraise the reasons for, and implications of, current controversy regarding buybacks.

This compact case is appropriate for upper-level undergraduate or graduate courses in financial accounting, tax and finance. This case provides an opportunity to analyze and evaluate stock buyback decisions in the context of the current controversy related to buybacks.

The study aims to examine the dividend omissions and dividend cuts behaviour of manufacturing and non-financial services firms to identify the determinants of dividend omissions and dividend cuts.

The study analyses the financial data of 3,546 firms from 2011 to 2020 (35,460 firm-year observations) using a dynamic random-effect probit panel regression model.

The results suggest that profitability, growth opportunity, leverage, liquidity, risk, extraordinary income, shareholding pattern and buyback are major determinants of dividend omissions. Similarly, dividend cut in the previous year, profitability, operating cash flow, risk and extraordinary income are major factors leading to dividend cuts.

Firms which omit the dividend are less likely to start paying dividend in subsequent years, whereas firms which cut the dividend may increase dividend in later years. Also, profitability decreases for a significant number of firms post dividend omission and cut. This indicates that dividend omission is a more prominent signal than a dividend cut for the financial health of a firm.

The determinants identified in the study enable analysts and portfolio managers to decide the propensity of dividend omission and cut even before actual announcements and can alleviate the significant loss in the portfolio. Also, managers and the board of directors would be able to monitor the firm’s financial performance to avoid the situation leading to dividend omissions and cuts.

The study strongly recommends that firms should voluntarily pay dividends to shareholders to encourage the healthy participation of retail shareholders in the equity market and create a long-term win–win situation for all stakeholders in society. If a large number of firms continue not to pay the dividend, the study appeals to the regulators to intervene to protect shareholders' interests for the greater good of society.

To the best of author’s knowledge, this is the first study to empirically identify the determinants of dividend omission and cut in the unique setting like India where dividend taxation had undergone a significant change.

Taking advantage of distinctive text-based measures of climate policy uncertainty and firm-specific exposure to climate change, this study aims to examine the impact of firm-specific vulnerability on dividend policy.

To mitigate endogeneity, the authors apply an instrumental-variable analysis based on climate policy uncertainty as well as use additional analysis using propensity score matching and entropy balancing.

The authors show that an increase in climate policy uncertainty exacerbates firm-specific exposure considerably. Exploiting climate policy uncertainty to generate exogenous variation in firm-specific exposure, the authors demonstrate that companies more susceptible to climate change are significantly less likely to pay dividends and those that do pay dividends pay significantly smaller dividends. For instance, a rise in firm-specific exposure by one standard deviation weakens the propensity to pay dividends by 5.11%. Climate policy uncertainty originates at the national level, beyond the control of individual firms and is thus plausibly exogenous, making endogeneity less likely.

To the best of the authors’ knowledge, this study is the first attempt in the literature to investigate the effect of firm-specific exposure on dividend policy using a rigorous empirical framework that is less vulnerable to endogeneity and is more likely to show a causal influence, rather than a mere correlation.

The purpose of this paper is to examine the association between company reputation and dividend policy.

In this study, sample of 98,809 firm-year observations from 22 countries covering 2005–2016 were used.

Firm reputation concerns are associated with higher propensities to pay dividends and payout ratios. Further, this positive effect is more pronounced for firms with high free cash flows, high information asymmetry and low institutional monitoring. The results are robust to an instrumental variable approach, propensity score matching and the Heckman two-stage correction approach while addressing endogeneity concerns.

These findings have significant implications for various stakeholders, such as existing and potential investors, managers, policymakers and regulators, by providing insights into the relationship between corporate reputation and firm dividend payout decisions. Corporate reputation is highlighted as crucial for accessing finance, emphasizing the role of national regulators and policymakers in facilitating firms' efforts to improve their reputation. The study highlights the dynamics of corporate reputation and dividend payout, calling for proactive engagement from regulators and policymakers. Crafting policies conducive to reputation-building can enhance firms' financial prospects, indicating the need for strategic interventions at managerial, regulatory and policy levels. Understanding the influence of economic context is crucial for firms to tailor reputation management strategies and optimize funding opportunities in different economic environments.

Overall, results suggest that reputation serves as a disciplining mechanism, where firms will pay dividends to maintain their reputations.

The aim of this article is to assess the macroeconomic consequences of some specific aspects of financialization (i.e. share buy-back) using a hybrid post-Keynesian model of growth and distribution based on Kaldorian and Kaleckian characteristics.

The study follows a post-Keynesian approach and deals with financialization issues by implementing several numerical simulations.

The numerical simulations reveal the negative real impacts of massive share repurchases on the rate of accumulation because they immediately siphon off revenues directly intended for investment projects. Moreover, the negative effect of share buy-backs is reinforced especially when firms' investment decisions are more sensitive to a variation in retained earnings. Next, this macro-model also reproduces several well-known figures of the Kaleckian tradition and the paradox of costs.

The present article can be considered as a starting point for further theoretical extensions and requires empirical validation.

The Kaldor-Kalecki macro-model could be useful for policymakers who are interested in containing some of the negative excesses of financialization.

This study aims to provide insights into different aspects of the extant literature on the effects of dividend announcements. Along with other outputs of a bibliometric study, this study provides deeper insights into the concentration of the extant literature and suggest future research agendas.

This study uses the bibliometric, network and content analysis of the dividend announcement literature indexed in Scopus. This study presents the temporal analysis, the network of authors, countries, author citations and the co-occurrence of author keywords. This study provides the concentration of the extant literature in three clusters and unearth some key future research areas. This study uses the latent Dirichlet allocation method for robustness.

A total of 54 documents examining the US sample have received 1,804 citations. Interestingly, the first article on emerging markets was published in 2002, when at least 34 articles on developed markets had already been published from 1982 to 2001. The content analysis of top-cited literature unveils diverse insights into dividend announcements’ effects on financial markets. Contagion effects negatively impact non-announcing banks, particularly larger ones. Dividend maintenance affects stock market momentum, influencing loser returns. While current dividend/earnings news may not predict future company performance, information content dominates bond market reactions to post-dividend announcements. Concomitantly, while financially constrained firms exhibit short-term gains but worse long-term performance following dividend increases, larger stock dividends send stronger market signals in China.

This study significantly contributes to the bibliometric and content analysis literature by analyzing the sample documents based on the sample examined. To the best of the authors’ knowledge, no previous bibliometric study in this domain has been conducted to explore the markets (developed and emerging) to which the samples examined belong and the quality of publications from developed and emerging markets.

We are the first to investigate the relationship between seasoned equity offerings (SEOs) and anchoring on historical high prices in China.

We use the ratio of the recent closing price to its historical high in the previous 12–60 months (anchoring-high-price ratio) to study its impact on the market timing of SEOs.

Empirical results show that the anchoring-high-price ratio significantly and positively affects the probability of additional stock issuances. Contrary to the USA market, the Chinese stock market reacts negatively to the SEOs at historical highs. Moreover, the anchoring-high-price ratio exacerbates the negative effect of announcements and leads to long-term underperformance. Finally, we investigate the impact of the anchoring-high-price ratio on a company’s capital structure, showing that the additional issuance anchoring on historical highs reduces the company’s leverage ratio in the long run. Overall, our findings support the anchoring theory and can help understand better the anchoring behavior of managers and the company’s decision on additional stock issuances.

We are the first to use the anchoring-high-price ratio to study the timing of SEOs. We find that the anchoring-high-price ratio positively affects the probability of SEOs. Unlike the USA, the Chinese stock market reacts negatively to SEOs at high prices. SEOs anchoring on historical highs reduce a firm’s leverage ratio in the long run. Finally, our results support the anchoring theory.

We explore the impact of equity liquidity on a firm’s dynamic leverage adjustments and the moderating impacts of leverage deviation and target instability on the link between equity liquidity and dynamic leverage in the UK market.

In applying the two-step system GMM, we estimate our model by exploring suitable instruments for the dynamic variable(s), i.e. lagged values of the dynamic term(s).

Our analyses document that a firm’s equity liquidity has a positive impact on the speed of adjustment (SOA) of its leverage ratio back to the target ratio in the UK market. We also demonstrate that the positive relationship between liquidity and SOA is more pronounced for firms whose current position is relatively close to their target leverage ratio and whose target ratio is relatively stable.

This study provides important implications for both firms’ managers and investors. Particularly, firms’ managers who wish to increase the leverage SOA to enhance firms’ value need to give great attention to their equity liquidity. Investors who want to evaluate firms’ performance could also consider their equity liquidity and leverage SOA.

We are the first to enrich the literature on leverage adjustments by identifying equity liquidity as a new determinant of SOA in a single developed country with many differences in the structure and development of capital markets, ownership concentration and institutional characteristics. We also provide new empirical evidence of the joint effect of equity liquidity, leverage deviation and target instability on leverage SOA.