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In search of stock repurchases determinants in listed Indonesian firms during regulatory changes

Moin, Abdul; Guney, Yilmaz; Kalak, Izidin El


Abdul Moin

Yilmaz Guney

Izidin El Kalak


Motivated by the introduction of share repurchases regulations in 1998 and 2007 coupled with unique characteristics of the Indonesian market, we investigate the effect of firms’ sub-optimal financial position on their share repurchases decisions. Then, we study the effect of these determinants through an exogenous shock, the 2007 regulatory change. We show that sub-optimal financial positions play a role in the corporate share repurchases decisions. Further, we find that the enactment of the regulations has a significant effect on firms’ undertaking share repurchases programs. Unlike the common perception and findings in the literature, we observe that the underpricing of shares has a weak effect on the Indonesian firms’ decisions to repurchase their stocks. Our results hold using several estimation methods that account for potential endogeneity issues.


Moin, A., Guney, Y., & Kalak, I. E. (2020). In search of stock repurchases determinants in listed Indonesian firms during regulatory changes. Journal of Economic Behavior and Organization, 176, 145-165.

Journal Article Type Article
Acceptance Date Apr 12, 2020
Online Publication Date Jun 5, 2020
Publication Date 2020-08
Deposit Date Jun 3, 2020
Publicly Available Date Oct 27, 2022
Journal Journal of Economic Behavior & Organization
Print ISSN 0167-2681
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 176
Pages 145-165
Keywords Share repurchases; Regulations; Dividends; Sub-optimal decisions; Underpricing; Indonesia
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