How do share repurchases affect ownership concentration?

Devra Golbe () and Ingmar Nyman ()

Journal of Corporate Finance, 2013, vol. 20, issue C, 22-40

Abstract: We study how share repurchases affect the ownership stake of outside blockholders in 950 publicly-traded US corporations from 1996 through 2001, using a control function approach to address the possible endogeneity of repurchases. We find that share repurchases tend to make outside ownership less concentrated: repurchasing 1% of outstanding common equity decreases the fraction owned by large shareholders by around one and a half percentage points. This may decrease outside shareholders' influence over firm decision-making. Our results are confirmed when we restrict the sample to institutional owners, but not to individual owners.

Keywords: Share repurchases; Ownership concentration; Blockholders; Corporate governance (search for similar items in EconPapers)
JEL-codes: G30 G32 G35 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:20:y:2013:i:c:p:22-40

DOI: 10.1016/j.jcorpfin.2012.11.002

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