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There are 506 announcements of stock repurchases from 1999.8.9 to the end of 2001 after Taiwan adopting the law of treasury stock. It¡¦s obviously that companies issued in the stock market need the law because the percent of applying is up to 37.23%. We study the announcements during 1999.8.9 to 2001.12.31 and try to find out the motives of stock repurchases. For understanding the effect of market prediction, we try to set up a prediction model and separate the result of market prediction to right and wrong. Regarding the factor of affecting the cumulative abnormal return after announcement, we argue that it¡¦s quite similar with cash dividend announcement as companies signal the good news of becoming better in the future. It infers that the effect of announcement relates to former accounting information. The result show as following: (1) the motives to stock repurchases are consistent with optimal leverage ratio hypothesis, dividend or tax hypothesis. The companies would intend to stock repurchase when the board of directors had higher collateral ratio or the enterprise ever used the subsidiary company to repurchase the stock. (2) we can¡¦t prove that the unexpected announcement has higher abnormal return than the expected one. (3) we also can¡¦t prove that the former accounting information affect the abnormal return, but we can see the it positively relates to the free cash flow, undervaluation, and the degree of information asymmetry.

Le rachat d’actions est devenu une technique de gestion des capitaux propres et des relations avec les actionnaires de plus en plus courante. Plusieurs études se sont intéressées aux déterminants de rachat d’actions. Cette recherche se positionne alors dans le prolongement de ces travaux en examinant les caractéristiques financières et de gouvernance susceptibles d’expliquer ce phénomène. Cependant, elle s’en différencie en mettant en évidence le rôle du cycle de vie de l’entreprise dans l’identification des périodes où les conditions de rachats sont les plus favorables.S’inscrivant dans le cadre d’une démarche hypothético-déductive, notre étude empirique est réalisée sur un échantillon de 754 programmes de rachat initiés par des firmes cotées sur le marché français entre 2002 et 2004. Afin de tester nos hypothèses de recherche, nous avons utilisé une méthodologie combinant l’analyse typologique, les tests univariés et les modèles de régression. L’examen des résultats montre certaines spécificités financières et de gouvernance des firmes qui réalisent des programmes de rachat d’actions par rapport à celles qui ne les réalisent pas. Par ailleurs, nous révélons une différence dans ces spécificités par rapport à la position dans le cycle de vie de l’entreprise. En effet, les firmes rachètent leurs actions pour couvrir leurs plans de stock-options dans les phases de démarrage et de croissance. Alors que le rachat sert à minimiser le risque des free cash-flows dans les phases de maturité et déclin. En outre, l’influence de la structure du conseil d’administration et l’actionnariat managérial sur la décision de rachat varient en fonction des phases du cycle de vie de la firme. / Stock repurchase is nowadays a widely used technique to manage equities and relations with shareholders. Several studies have dealt with the determinants of stock buyback. This thesis extends this research stream by examining the importance of the firms’ financial and governance characteristics on stock repurchase programs. In particular, it sheds lights on the role of corporate life-cycle in shaping firm behavior in this respect. Using a hypothetical-deductive approach, our study is carried out on a sample of 754 stock repurchase programs announced between 2002 and 2004 by French public firms. To test our research hypotheses, we combine various empirical methods including cluster analysis, univariate tests and logistic regression. The results show common financial and governance characteristics of firms that repurchase shares. More specifically, we provide empirical evidence that the effect of these characteristics varies depending on the life cycle position of the firm. Indeed, firms repurchase stocks to exercise their stock options during the start-up and growth phase to distribute excess free cash flow in the maturity and decline phases. Moreover, the effects of board leadership structures of directors and managers ownership on the decision to repurchase vary with the life-cycle phases.

<p>In May 2000 share repurchases were legalized in Sweden, with the purpose to provide companies with an efficient and flexible way to distribute capital. To buy back shares gives companies several benefits which are discussed in our study. The lack of academic research about this topic for Swedish companies gave us an incentive to provide knowledge specifically for this market. When companies announce a share repurchase program they are subject to uncertainty about the society’s reaction and economic consequences. Individuals within a well established organizational field deal rationally with uncertainty by adjusting to their institutional environment. The institutional environment can be defined as an abstract structure of regulations and behavioral norms that guide human’s decisions. This often leads to homogeneity in companies’ culture, structure and output. We ask the question if companies are realizing repurchase programs in a similar way over time, and if share repurchases have been developed as a more common used financial instrument since 2000. Our second question is if companies that decide to buy back shares pursue this under similar economic conditions as a result from becoming homogeneous.</p><p>The purpose of this study is to describe how institutional pressures in form of coercive, normative and mimetic isomorphism have affected companies’ decision to repurchase shares. We want to explain if there is an upward going trend of share repurchases, a standardized way to repurchase over time and if this decision can be determined by similarities in certain financial indicators of a company’s economic situation. To answer our purpose we used a quantitative research strategy with a deductive approach. The collected data was analyzed in a logistic regression analysis and by interpretations of descriptive statistics. We decided to examine for mimetic isomorphism public companies listed within the industrial sector on Stockholm Stock Exchange from the years 2000-2006. For the test of coercive and normative isomorphism with a logistic regression analysis we had to limit ourselves to investigate the years 2001-2003.</p><p>In reality the three institutional pressures are working simultaneously and should together lead to a common perception about share repurchases among companies. For our testing we separated institutional isomorphism based on our theoretical preconceptions. This allowed us to analyze each individual institutional pressure and how they interact together. We defined mimetic isomorphism as companies adjusting their repurchase behavior to other companies within the industrial sector. Our result has not shown any indications of such a behavior concerning time, amount or frequency of the buybacks. Testing if certain financial indicators such as excess cash, liquidity, solvency, dividends, volatile operative income, prior year return, growth opportunities, companies’ size, ownership concentration, institutional and individual shareholders could explain stock repurchase activity gave us the possibility to evaluate coercive and normative isomorphism. But the question how institutional isomorphism affects companies’ repurchase decisions still remains unanswered. We have not found any certain financial indicator which motivates companies’ decision to buy back their own shares. The decision might therefore be carried out under very different economic conditions and with different objectives. In the industrial sector and generally in the whole Swedish market only a relatively low proportion of companies buy back shares. The stated findings for the Swedish market imply a need for further investigations over a longer time horizon and for a larger population. Further investigations in this topic which has the potential to provide recent insight into the stock repurchase decision for Swedish companies would enhance and verify our statements.</p>

In May 2000 share repurchases were legalized in Sweden, with the purpose to provide companies with an efficient and flexible way to distribute capital. To buy back shares gives companies several benefits which are discussed in our study. The lack of academic research about this topic for Swedish companies gave us an incentive to provide knowledge specifically for this market. When companies announce a share repurchase program they are subject to uncertainty about the society’s reaction and economic consequences. Individuals within a well established organizational field deal rationally with uncertainty by adjusting to their institutional environment. The institutional environment can be defined as an abstract structure of regulations and behavioral norms that guide human’s decisions. This often leads to homogeneity in companies’ culture, structure and output. We ask the question if companies are realizing repurchase programs in a similar way over time, and if share repurchases have been developed as a more common used financial instrument since 2000. Our second question is if companies that decide to buy back shares pursue this under similar economic conditions as a result from becoming homogeneous. The purpose of this study is to describe how institutional pressures in form of coercive, normative and mimetic isomorphism have affected companies’ decision to repurchase shares. We want to explain if there is an upward going trend of share repurchases, a standardized way to repurchase over time and if this decision can be determined by similarities in certain financial indicators of a company’s economic situation. To answer our purpose we used a quantitative research strategy with a deductive approach. The collected data was analyzed in a logistic regression analysis and by interpretations of descriptive statistics. We decided to examine for mimetic isomorphism public companies listed within the industrial sector on Stockholm Stock Exchange from the years 2000-2006. For the test of coercive and normative isomorphism with a logistic regression analysis we had to limit ourselves to investigate the years 2001-2003. In reality the three institutional pressures are working simultaneously and should together lead to a common perception about share repurchases among companies. For our testing we separated institutional isomorphism based on our theoretical preconceptions. This allowed us to analyze each individual institutional pressure and how they interact together. We defined mimetic isomorphism as companies adjusting their repurchase behavior to other companies within the industrial sector. Our result has not shown any indications of such a behavior concerning time, amount or frequency of the buybacks. Testing if certain financial indicators such as excess cash, liquidity, solvency, dividends, volatile operative income, prior year return, growth opportunities, companies’ size, ownership concentration, institutional and individual shareholders could explain stock repurchase activity gave us the possibility to evaluate coercive and normative isomorphism. But the question how institutional isomorphism affects companies’ repurchase decisions still remains unanswered. We have not found any certain financial indicator which motivates companies’ decision to buy back their own shares. The decision might therefore be carried out under very different economic conditions and with different objectives. In the industrial sector and generally in the whole Swedish market only a relatively low proportion of companies buy back shares. The stated findings for the Swedish market imply a need for further investigations over a longer time horizon and for a larger population. Further investigations in this topic which has the potential to provide recent insight into the stock repurchase decision for Swedish companies would enhance and verify our statements.

The earnings game and myopic performance focus induce managers to use judgment and influence to alter the reported earnings. Earnings management is the umbrella term for such manipulative actions, by accruals management or real activates management. The implicit market reactions by the stock returns indicate the effect of EM and if the behaviors are opportunistic or informative for the stakeholders. Accounting variables explain less of the stock return variation and speculative short-term news drives the variation of stock return. Research Question: Can earnings management indicators improve the forecasting of stock returns? The main purpose of the study is to investigate whether EM can be utilized to forecast returns from improving the forecasting of earnings. The authors will include both AM and RAM measures to investigate the different inherent forecasting abilities, adding to the asset pricing research and valuation area. The authors aim to enhance the explanation of cross-sectional variation of stock returns from accounting variables. The authors aim to develop a model more specified to explain the future stock returns from the accounting relationships. An additional purpose is to include transactions with the firm (stock repurchases) to potentially increase the signaling value of the manipulation behaviors. The theoretical framework consists of a discussion of theories and empirical findings regarding the accounting characteristic and relationship with stock returns. Earnings management is explained in-depth along with the empirical findings related to the concept. The capital market perspective is explained by the efficient market and behavioral finance. The chapter is concluded by concepts explaining the relationship and explanations for earnings management and the impact of information. The sample consists of 3545 firms from NASDAQ and NYSE for the years 1992-2012, which equates to around 40 000 observations. We utilize 11 different EM indicators, constructed to capture abnormal components which indicate manipulative actions. The EM indicators’ association with future stock returns is tested by yearly and industry-yearly firm characteristics framework regressions. The firm characteristic framework is developed to control for firm characteristics and evaluate the standalone effect of EM. The result is expanded by investigating earnings persistence, correlations, robust regression and portfolio sorts. The results suggest that total accruals, discretionary accruals, unexpected core earnings, production cost and stock returns are associated with subsequent stock returns. Abnormal SG&amp;A expenses, Abnormal R&amp;D expenses and abnormal cash flows from operations are not associated with stock returns. Earnings are downward manipulated prior and during stock repurchases. The change in ATO and PM diagnostic captures AM but not RAM. The concluding remarks are that EM indicators are associated with future stock returns and improve the forecasting of stock returns via a more accurate forecast of earnings.

In this study, we follow Cooper et al. (2017) and intend to further investigate income-decreasing real earnings management through altering production and discretionary expenditure and focus on such actions taken by management prior to stock repurchase. We take on a European perspective of IFRS on real earnings management and empirically test to what extent Swedish listed firms use real earnings management prior to stock repurchases to lower share prices. We follow Roydchowdhury (2006) and Cooper et al. (2017) and establish the firms normal level of real earnings management to compare with the period when firms anticipate stock repurchases. We present our data and results through descriptive statistics and use variables identified by Zang (2011) to perform correlation and regression tests accordingly with Cooper et al. (2017). Our results suggest that managers of Swedish firms on average engage in income-increasing real earnings management and decrease such management actions prior to stock repurchases. These findings emphasize the influence of real operating decisions by firms’ that must be considered by the market around major corporate events similar to repurchasing stock.

Recent increases in stock repurchases among U.S. corporations coupled with a historically low cost of debt since the Global Financial Crisis has created media speculation that firms in recent years are paying for their expanding share buyback programs with debt. Repurchasing stock by increasing leverage, instead of using internal funds, implies that managers may speculate on current low interest rate environments at the expense of shareholders. Recent studies find that stock repurchases are associated with reductions in future firm employment and investments such as capital expenditures and research and development expenses. This study expands on prior studies by evaluating how debt-financed stock repurchases affect firm investment, investigating the likelihood of these repurchases in low interest rate environments and assessing the effects on firm value. Results confirm that, in recent years, debt-financed repurchases have increased substantially and the probability of debt-financed repurchases increases in the presence of low interest rates. This relationship is especially pronounced in the years following the Global Financial Crisis. Debt-financed repurchases are associated with small reductions in firm investment; however, these reductions are significantly less after adjusting for industry conditions. Finally, there is little evidence that the method of financing repurchases affects firm value nor does it increase a firm's operating performance.

Denna studie visar utbetalningspolitiken hos företag noterade på Stockholmsbörsen år 2000-2015. Svensk utbetalningspolitik skiljer sig från utbetalningspolitiken i USA och inom EU. I Sverige fick återköp som utbetalningsform stor genomslagskraft år 2000 men trots detta är utdelningar fortsatt den dominerande utbetalningsformen idag. Vid en uppdelning i finansiella och industriella företag blir det tydligt att finansiella företag fått en allt mer betydelsefull roll inom svensk utbetalningspolitik. En ökad koncentration av det kassaflöde samtliga företag fördelar till aktieägare tycks inte kunna urskiljas på den svenska marknaden. Skiljer man på finansiella och industriella företag går det att se en ökad koncentration av det kassaflöde som fördelas av finansiella företag. År 2015 finns en stor andel mogna företag på Stockholmsbörsen vilket förklarar att total utbetalning av företag har ökat sedan 2000. Det framkommer genom att studera företagens kapitalstruktur och fas i den ekonomiska livscykeln. / This paper depicts payout policies of companies listed on the Stockholm Stock Exchange (SSE) 2000-2015. Payout policy in Sweden differs significantly from policy in the U.S. and the rest of the EU. In Sweden open market stock repurchases (OMR) came to be the dominant method of payout back in 2000. However, since then dividends have taken over the scene. Comparing financial and industrial corporations, makes it evident that financial corporations have come to gain prominence when it comes to shaping payout policy. It is not possible to entail an increasing concentration of cash flow that companies distribute to shareholders, when investigating the entire Swedish stock market. Dividing between the two sectors proves a heightened concentration of payouts among financial corporations. In 2015 mature companies have come to gain a greater share of SSE, which explains the increased number of dividend paying corporations since 2000. This becomes evident when examining the capital structure of the companies and their phase in the economic lifecycle.

Följande uppsats undersöker hur svensk utbetalningspolitik har utvecklats under åren 1992-2012. Urvalet består av de företag som under våren 2014 var noterade på Stockholmsbörsens “Large”, “Mid” eller “Small Cap” lista. Återköpens andel av den totala utbetalningsandelen visar sig inte vara lika hög som andra internationella studier har visat. Det är istället utdelningarna som utgör merparten av de totala utbetalningarna. Däremot så har andelen företag som enbart delar ut minskat trots att utdelningarna ökat, vilket också styrks av resultat från tidigare studier. Lägre nettoresultat under finanskrisen följs av minskade utbetalningar under 2008-2009. Återköpen minskar under denna period markant till att i stort sätt utebli, vilket bekräftar tidigare studier. / This paper provides evidence on Swedish payout policy during the past 20 years (1992-2012). The sample data consists of companies that were listed on Stockholm Stock Exchange (SSE) “Large”, “Mid” or “Small Cap” list during spring 2014. We show that repurchases of shares still represents a small proportion of the total payout, which contradicts results from other international studies. The dividends therefore still constitute the bulk of the total payments. We document a drop in net income during the financial crisis followed by reduced payments during 2008-2009. Repurchases decrease significantly during this period to virtually absent; confirming previous studies that argue that repurchases are a more flexible payout method than dividends.