Do bank ties influence stock repurchases in a bank-based financial system during financial distress? A pre-registered report

Hideaki Sakawa*, Naoki Watanabel, Konari Uchida

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This pre-registered study seeks to investigate the effects of bank ties on corporate repurchase decisions and stock price reactions to buyback announcements. We make causal inferences to provide more insights into bank ties for stock repurchase decisions during extreme financial distress. We focus on the COVID-19 pandemic as an exogenous shock and identify whether the COVID-19 shock affected the bank-ties effect of the motives of stock repurchase decisions in a bank-based financial system. Our study sheds light on the motives behind stock repurchase decisions and the role of banks in corporate cash distribution to shareholders. Furthermore, our study contributes to understanding how extreme financial distress, such as COVID-19, affects the motive for stock repurchase in a bank-based financial system.

Original languageEnglish
Article number102380
JournalPacific Basin Finance Journal
DOIs
Publication statusAccepted/In press - 2024

Keywords

  • Bank ties
  • Bank-based financial system
  • COVID-19
  • Japan
  • Stock repurchase

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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