Share repurchases, shareholder rights, and corporate governance provisions

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


Grounded in agency theory, this study seeks to explore how repurchase activity is influenced by the strength of shareholder rights. The empirical evidence shows that firms where shareholder rights are weaker tend to repurchase less stock. I argue that this is because managers of firms with weak shareholder rights are better able to exploit the weak shareholder rights and retain more cash within the firm, potentially to extract private benefits as alleged by the free cash flow hypothesis. Managers of firms with strong shareholder rights, on the contrary, are forced to disgorge cash to stockholders in the form of repurchases. In addition, I test the dividend-substitution hypothesis and find no evidence that repurchases substitute for dividends.

Original languageEnglish (US)
Pages (from-to)35-47
Number of pages13
JournalNorth American Journal of Economics and Finance
Issue number1
StatePublished - Mar 2006

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


Dive into the research topics of 'Share repurchases, shareholder rights, and corporate governance provisions'. Together they form a unique fingerprint.

Cite this