Opportunistic Stock Repurchases for Owner-Manager Control: Evidence from the Korean Stock Market

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• 作者：Kyung Soon Kim ; Chune Young Chung ; Jin Hwon Lee and Seun Young Park
• 刊名：Asia-Pacific Journal of Financial Studies
• 出版年：2016
• 出版时间：April 2016
• 年：2016
• 卷：45
• 期：2
• 页码：309-335
• 全文大小：147K
• ISSN：2041-6156

文摘

We examine whether opportunistic earnings management before a repurchase and long-term performance after a repurchase depend on repurchase options and insider ownership. We find that the negative association between pre-stock repurchase earnings management and abnormal long-term performance after stock repurchase is more pronounced when firms choose the direct stock repurchase method over an indirect repurchase through a trust fund. Our findings also show that the negative association between pre-repurchase accruals and long-term performance under direct stock repurchases is only evident when the ownership percentage of managers and their affiliates is less than 50%. In addition, our main findings are more pronounced in firms with a high degree of corporate information asymmetry.