Why do UK firms repurchase their own shares? Online publication date: Thu, 13-Oct-2022
by Elisabeth Dedman; Shan Hua; Thanamas Kungwal
International Journal of Banking, Accounting and Finance (IJBAAF), Vol. 13, No. 2, 2022
Abstract: We examine the practice of share repurchases in the UK from 2000 to 2016 We find that an important regulatory reform in 2003, which relaxed previously strict rules about repurchases, was followed by a significant increase in repurchase activity by UK main-market listed firms We then examine the motivation for repurchases, testing several key hypotheses from prior literature. Our analysis of 6,228 firm years provides support, across both regulatory regimes, for both the free cash flow and the investment hypotheses. However, there are also changes in share repurchase motivations following the easing of restrictions. Important differences between UK and US payout practices are identified.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Banking, Accounting and Finance (IJBAAF):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com