Share Repurchases, Undervaluation, and Corporate Social Responsibility

被引:0
|
作者
Bobenhausen, Nils [1 ]
Breuer, Wolfgang [1 ]
Knetsch, Andreas [1 ,2 ]
Siemer, Luis Maria [1 ]
机构
[1] Rhein Westfal TH Aachen, Aachen, Germany
[2] Leibniz Inst Financial Res SAFE, Theodor W Adorno Pl 3, D-60323 Frankfurt, Germany
关键词
corporate social responsibility; misvaluation; share repurchase; INSTITUTIONAL INVESTORS; PAYOUT POLICY; STAKEHOLDER ORIENTATION; INFORMATION-CONTENT; STOCK REPURCHASES; PRICE PERFORMANCE; CASH HOLDINGS; TENDER OFFERS; AGENCY COSTS; EXCESS CASH;
D O I
10.1177/00076503241310700
中图分类号
F [经济];
学科分类号
02 ;
摘要
This study examines how firms' socially responsible behavior relates to the timing of their share repurchases, considering share mispricing and the resulting wealth transfer between sellers and ongoing shareholders. We hypothesize that firms with a stronger commitment to societal goals prioritize the interests of all stakeholders more equally than those with a weaker commitment. Therefore, their managers are less likely to take advantage of the wealth transfer from selling to ongoing shareholders, which occurs when the firm is undervalued. Our results show that firms with higher corporate social responsibility (CSR) engagement, ceteris paribus, announce repurchases during periods of lower undervaluation. Additional analyses show that this effect is more pronounced when investor protection is stronger at the country level. Moreover, higher institutional ownership increases the relevance of undervaluation in buyback decisions and the distribution of excess cash is a relatively more important reason for share repurchases when firms display higher CSR engagement. Overall, our findings demonstrate that firms that generally act in a socially responsible manner also refrain from exploiting sellers for the benefit of ongoing investors.
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页数:64
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