Share repurchases under uncertainty: U.S. evidence

Pan(dem)ic reactions in Turkish stock market: evidence from share repurchases

“…This was interesting for two reasons. One, although signaling or undervaluation is the most well-known motive attributed to share repurchases, 2 one might justifiably argue that the main motivation in these times of unprecedented turmoil, would rather be holding more cash (Pirgaip & Dinçergök, 2019 ). Indeed, repurchase actions in the vast majority of countries were canceled by the firms 3 or restricted by the regulatory bodies.…”

Pan(dem)ic Reactions in Turkish Stock Market: Evidence from share repurchases

“…First, although signalling or undervaluation is the most well-known motive attributed to share repurchases [2], one might justi ably argue that the main motivation in these times of unprecedented turmoil, would rather be holding more cash (Pirgaip and Dinçergök, 2019). Indeed, repurchase actions in the vast majority of countries were cancelled by the rms [3] or restricted by the regulatory bodies [4].…”

Investor horizons and corporate policies under uncertainty

“…more flexible in nature as they carry less pre-commitments. Therefore, repurchase decisions should be more responsive to increases in uncertainty compared to non-cyclical dividend decisions (see Haw et al, 2011;Pirgaip & Dinçergök, 2019).…”

“…Repurchase trades generally provide price support and can lead to short-term positive market responses (e.g., Keswani et al, 2007;McNally et al, 2006;Zhang, 2005). However, as uncertainty shocks erode the stability of projected cash flows, which is a strong determinant of share repurchase decisions (Brav et al, 2005), managers tend to make less or no repurchases under high levels of uncertainty (Pirgaip & Dinçergök, 2019). In such times, managers have a higher propensity to retain cash more conservatively rather than upholding their payout policies, as they anticipate a deteriorating future financial situation (Buchanan et al, 2017;Chay & Suh, 2009;Walkup, 2016).…”

“…Collectively, this study contributes to the extant literature on several fronts. It builds on the early literature on real options theory (Baldwin, 1982;Bernanke, 1983;Brennan & Schwartz, 1985;McDonald & Siegel, 1986;Titman, 1985) and advances the empirical works of Kang et al (2014), Baker et al (2016), and Pirgaip and Dinçergök (2019) among others. Specifically, we show that shareholder horizons assume a critical role in explaining cross-sectional heterogeneities in companies' investment, hiring, and share buyback sensitivities to uncertainty.…”