A Study on the Characteristics of Share Repurchasing Firms in Korea

서지정보

· 발행기관 : 한국로고스경영학회
· 수록지 정보 : 로고스경영연구 / 19권 / 1호 / 41 ~ 64페이지
· 저자명 : 성현모, 안주은

초록

ven though the number of share repurchasing firms and the amount of share repurchases are increasing in Korea, there is no consensus on the characteristics of share repurchasing firms. Therefore, the purpose of this study was to empirically analyze such characteristics.
Share repurchasing firms listed in the KOSPI and KOSDAQ markets from 1996 to 2016 were analytically compared to non-share repurchasing control firms that were similar in size and belonged to the same industry as share repurchasing firms.
Univariate analyses revealed that KOSPI share repurchasing firms, before share repurchasing activity, were cash-rich firms with smaller fixed assets and lower major shareholders’ equity relative to the control firms. However, these firms’ cash richness was likely due to the disposal of their fixed assets rather than higher earnings. On the other hand, KOSDAQ share repurchasing firms are also characterized before share repurchasing activity as cash-rich firms with smaller fixed assets and lower major shareholders’ equity relative to their control firms. However, their cash richness is unlikely due to the disposal of their fixed assets but instead to higher earnings and operating cash flows.
The empirical results for both KOSPI and KOSDAQ share repurchasing firms are consistent with the free cash flow hypothesis and the major shareholders’ equity enhancement hypothesis, despite different reasons for their cash richness. The signaling hypothesis was not supported by the empirical results.

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