How does Actual Share Repurchase Affect Investment Activities? The Role of Insider

• Main Authors: LI, HUEI-CING, 李蕙卿
• Other Authors: HUANG, CHIH-JEN
• Format: Others
• Language: en_US
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/33077729402846603113

碩士 === 靜宜大學 === 財務金融學系 === 105 === The sample of this study included the listing of the actual share repurchase in Taiwan Economic Journal (TEJ) from 2000 to 2016. Based upon a unique dataset which provides complete histories of actual share repurchase in listed companies, we explore the relationship between the actual share repurchase and the abnormal investment. In this paper, we develop an empirical framework to measure abnormal investment based on Fu (2010) methods. The empirical results show that the higher the shareholdings of the company insider holders, the more actual share repurchase. In addition, we also find that the negative relationship between actual share repurchase ratio and abnormal investment in growth companies, namely that the companies are likely to be underinvestment. Contribution of this study is to provide new evidence on the actual share repurchase propensity that is different from those presented in the existing literature.