How do share repurchases affect ownership concentration?

Devra Golbe () and Ingmar Nyman ()

No 430, Economics Working Paper Archive at Hunter College from Hunter College Department of Economics

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 one percent 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: 2010, Revised 2012
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Journal Article: How do share repurchases affect ownership concentration? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:htr:hcecon:430

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