Corporate Cash Holdings and Share Buyback: Evidence from Emerging Markets

Vedika Saxena and Seshadev Sahoo

Journal of Emerging Market Finance, 2023, vol. 22, issue 4, 437-463

Abstract: This study evaluates corporate cash holdings (CCHs) as a determinant of share buyback for three emerging economies, India, Malaysia, and South Korea, from 2002 to 2020. We find CCH as a significant determinant of share buyback for our sample nations. Our results suggest that share buyback is a flexible way for firms to distribute excess cash across our sample nations. Our study also documents the impact of different country-level investor protection frameworks on buybacks. A favorable relationship between a strong investor protection environment (good governance) and buyback explains the effective role of buyback in resolving agency conflicts compared to dividends. JEL Codes: C5, F3, G3

Keywords: Cash holdings; dividends; excess cash; investor protection; share buyback (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:emffin:v:22:y:2023:i:4:p:437-463

DOI: 10.1177/09726527231184555

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