In search of stock repurchases determinants in listed Indonesian firms during regulatory changes

Abdul Moin, Yilmaz Guney, Izidin El kalak

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


Motivated by the introduction of share repurchases regulations in 1998 and 2007 coupled with unique characteristics of the Indonesian market, we investigate the effect of firms’ sub-optimal financial position on their share repurchases decisions. Then, we study the effect of these determinants through an exogenous shock, the 2007 regulatory change. We show that sub-optimal financial positions play a role in the corporate share repurchases decisions. Further, we find that the enactment of the regulations has a significant effect on firms’ undertaking share repurchases programs. Unlike the common perception and findings in the literature, we observe that the underpricing of shares has a weak effect on the Indonesian firms’ decisions to repurchase their stocks. Our results hold using several estimation methods that account for potential endogeneity issues.
Original languageEnglish
Pages (from-to)145-165
Number of pages21
JournalJournal of Economic Behavior & Organization
Early online date5 Jun 2020
Publication statusPublished - Aug 2020
Externally publishedYes

Bibliographical note

Publisher Copyright:
© 2020

Copyright 2020 Elsevier B.V., All rights reserved.


  • Dividends
  • Indonesia
  • Regulations
  • Share repurchases
  • Sub-optimal decisions
  • Underpricing

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management


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