Share Repurchases in Sweden: The Mimicking Hypothesis
(2012) BUSN88 20121Department of Business Administration
- Abstract (Swedish)
- I provide evidence that firms send a negative signal on its non-repurchasing industry counterparts. This is consistent with competitive effects. These negative effects are common for mature firms and are sent by the largest repurchasing firm. The market attributes non-repurchasing mature firms as those ones, which do not maximize value for shareholders because managers have excess cash at their disposal. The negative effects do not make a firm to announce share buybacks following its repurchasing rivals. Nevertheless, repurchase announcements cluster for firms with a few investment possibilities. Thus, I do not support the Mimicking Hypothesis among Swedish firms that a decision to repurchase is based on the rival’s share buyback.... (More)
- I provide evidence that firms send a negative signal on its non-repurchasing industry counterparts. This is consistent with competitive effects. These negative effects are common for mature firms and are sent by the largest repurchasing firm. The market attributes non-repurchasing mature firms as those ones, which do not maximize value for shareholders because managers have excess cash at their disposal. The negative effects do not make a firm to announce share buybacks following its repurchasing rivals. Nevertheless, repurchase announcements cluster for firms with a few investment possibilities. Thus, I do not support the Mimicking Hypothesis among Swedish firms that a decision to repurchase is based on the rival’s share buyback. Moreover, repurchase announcements of Swedish firms are not affected by the repurchase made by the largest company in an industry. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/3095352
- author
- Supkareva, Irina LU
- supervisor
- organization
- course
- BUSN88 20121
- year
- 2012
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- intra-industry effects, share repurchases, share buyback determinants, mimicking, competitive, contagion
- language
- English
- id
- 3095352
- date added to LUP
- 2012-09-25 09:18:16
- date last changed
- 2012-09-25 09:18:16
@misc{3095352, abstract = {{I provide evidence that firms send a negative signal on its non-repurchasing industry counterparts. This is consistent with competitive effects. These negative effects are common for mature firms and are sent by the largest repurchasing firm. The market attributes non-repurchasing mature firms as those ones, which do not maximize value for shareholders because managers have excess cash at their disposal. The negative effects do not make a firm to announce share buybacks following its repurchasing rivals. Nevertheless, repurchase announcements cluster for firms with a few investment possibilities. Thus, I do not support the Mimicking Hypothesis among Swedish firms that a decision to repurchase is based on the rival’s share buyback. Moreover, repurchase announcements of Swedish firms are not affected by the repurchase made by the largest company in an industry.}}, author = {{Supkareva, Irina}}, language = {{eng}}, note = {{Student Paper}}, title = {{Share Repurchases in Sweden: The Mimicking Hypothesis}}, year = {{2012}}, }