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

Abdul Moin, Yilmaz Guney, Izidin El kalak

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

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
Volume176
Early online date5 Jun 2020
DOIs
Publication statusPublished - Aug 2020

Fingerprint Dive into the research topics of 'In search of stock repurchases determinants in listed Indonesian firms during regulatory changes'. Together they form a unique fingerprint.

Cite this