The DOI matches its Crossref record; 34 of the 34 references it cites were found in a registry or an index.
The cost of financial flexibility: Evidence from share repurchases
Open accessAbstract
Over the last two decades, share repurchases have emerged as the dominant payout channel, offering a more flexible means of returning excess cash to investors. However, little is known about the costs associated with payout-related financial flexibility. Using a unique identification strategy, we document a significant cost. We find that actual repurchase investments underperform hypothetical investments that mechanically smooth repurchase dollars through time by approximately two percentage points per year on average. This cost of financial flexibility is correlated with earnings management, managerial entrenchment, and less institutional monitoring.
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
Cites
Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers
Jensen, M. C. (1986) · Cited by 17,275
Illiquidity and stock returns: cross-section and time-series effects
Amihud, Y. (2002) · Journal of Financial Markets · doi:10.1016/s1386-4181(01)00024-6 · Cited by 9,963
CEO Overconfidence and Corporate Investment
MALMENDIER, U., & TATE, G. (2005) · The Journal of Finance · doi:10.1111/j.1540-6261.2005.00813.x · Cited by 3,669
What Matters in Corporate Governance?
Bebchuk, L., Cohen, A., & Ferrell, A. (2009) · Review of Financial Studies · doi:10.1093/rfs/hhn099 · Cited by 2,906
Payout policy in the 21st century
Brav, A., Graham, J. R., Harvey, C. R., & Michaely, R. (2005) · Journal of Financial Economics · doi:10.1016/j.jfineco.2004.07.004 · Cited by 2,239
Corporate Cash Reserves and Acquisitions
Harford, J. (1999) · The Journal of Finance · doi:10.1111/0022-1082.00179 · Cited by 2,064
Institutional Investors and Executive Compensation
Hartzell, J. C., & Starks, L. T. (2003) · The Journal of Finance · doi:10.1046/j.1540-6261.2003.00608.x · Cited by 2,005
Market underreaction to open market share repurchases
Ikenberry, D., Lakonishok, J., & Vermaelen, T. (1995) · Journal of Financial Economics · doi:10.1016/0304-405x(95)00826-z · Cited by 1,733
Why Do Firms Repurchase Stock?
Dittmar, A. K. (2000) · The Journal of Business · doi:10.1086/209646 · Cited by 932
Investor Sophistication and Patterns in Stock Returns after Earnings Announcements
Bartov, E., Radhakrishnan, S., & Krinsky, I. (2000) · The Accounting Review · doi:10.2308/accr.2000.75.1.43 · Cited by 745
Actual Share Reacquisitions in Open‐Market Repurchase Programs
Stephens, C. P., & Weisbach, M. S. (1998) · The Journal of Finance · doi:10.1111/0022-1082.115194 · Cited by 744
When a buyback isn’t a buyback: open market repurchases and employee options
Kahle, K. M. (2002) · Journal of Financial Economics · doi:10.1016/s0304-405x(01)00095-2 · Cited by 569
Stock repurchases as an earnings management device
Hribar, P., Jenkins, N. T., & Johnson, W. B. (2006) · Journal of Accounting and Economics · doi:10.1016/j.jacceco.2005.10.002 · Cited by 448
Barclay, M. J., & Smith, C. W. (1988) · Journal of Financial Economics · doi:10.1016/0304-405x(88)90022-0 · Cited by 422
Market timing, investment, and risk management
Bolton, P., Chen, H., & Wang, N. (2013) · Journal of Financial Economics · doi:10.1016/j.jfineco.2013.02.006 · Cited by 410
The Nature and Persistence of Buyback Anomalies
Peyer, U., & Vermaelen, T. (2009) · Review of Financial Studies · doi:10.1093/rfs/hhn024 · Cited by 327
Executive Financial Incentives and Payout Policy: Firm Responses to the 2003 Dividend Tax Cut
BROWN, J. R., LIANG, N., & WEISBENNER, S. (2007) · The Journal of Finance · doi:10.1111/j.1540-6261.2007.01261.x · Cited by 290
The Takeover Deterrent Effect of Open Market Share Repurchases
Billett, M. T., & Xue, H. F. (2007) · The Journal of Finance · doi:10.1111/j.1540-6261.2007.01258.x · Cited by 237
Managerial timing and corporate liquidity:
Brockman, P., & Chung, D. Y. (2001) · Journal of Financial Economics · doi:10.1016/s0304-405x(01)00068-x · Cited by 232
The Nature and Persistence of Buyback AnomaliesPreprint
Peyer, U. C., & Vermaelen, T. (2005) · SSRN Electronic Journal · doi:10.2139/ssrn.687289 · Cited by 217
Errors in estimating share repurchases
Banyi, M. L., Dyl, E. A., & Kahle, K. M. (2008) · Journal of Corporate Finance · doi:10.1016/j.jcorpfin.2008.06.004 · Cited by 211
Motives for Multiple Open-Market Repurchase Programs
Jagannathan, M., & Stephens, C. P. (2003) · Financial Management · doi:10.2307/3666337 · Cited by 209
The timing of financing decisions: An examination of the correlation in financing waves☆
Dittmar, A. K., & Dittmar, R. F. (2008) · Journal of Financial Economics · doi:10.1016/j.jfineco.2007.11.007 · Cited by 181
On the Timing and Execution of Open Market Repurchases
Cook, D. O., Krigman, L., & Leach, J. C. (2003) · Review of Financial Studies · doi:10.1093/rfs/hhg028 · Cited by 178
Can managers time the market? Evidence using repurchase price data
Dittmar, A. K., & Field, L. C. (2014) · Journal of Financial Economics · doi:10.1016/j.jfineco.2014.09.007 · Cited by 161
The value of financial flexibility and corporate financial policy
Rapp, M. S., Schmid, T. M., & Urban, D. (2014) · Journal of Corporate Finance · doi:10.1016/j.jcorpfin.2014.08.004 · Cited by 157
Do managers time the market? Evidence from open-market share repurchases
Chan, K., Ikenberry, D. L., & Lee, I. (2007) · Journal of Banking & Finance · doi:10.1016/j.jbankfin.2006.09.017 · Cited by 107
Cheng, Y., Harford, J., & Zhang, T. (2015) · Journal of Financial and Quantitative Analysis · doi:10.1017/s0022109015000149 · Cited by 99
Do Firms Buy Their Stock at Bargain Prices? Evidence from Actual Stock Repurchase Disclosures
Ben-Rephael, A., Oded, J., & Wohl, A. (2013) · European Finance Review · doi:10.1093/rof/rft028 · Cited by 99
Bargeron, L. L., Kulchania, M., & Thomas, S. (2011) · Journal of Financial Economics · doi:10.1016/j.jfineco.2011.02.004 · Cited by 76
The Effects of Ownership and Stock Liquidity on the Timing of Repurchase Transactions
Cesari, A. D., Espenlaub, S. K., Khurshed, A., & Simkovic, M. (2010) · Journal of Corporate Finance · doi:10.1016/j.jcorpfin.2012.06.004 · Cited by 75
Investor Heterogeneity, Investor-Management Disagreement and Share Repurchases
Huang, S., & Thakor, A. V. (2012) · Review of Financial Studies · doi:10.1093/rfs/hht043 · Cited by 66
The Timing and Source of Long-Run Returns Following Repurchases
Bargeron, L. L., Bonaimé, A. A., & Thomas, S. (2017) · Journal of Financial and Quantitative Analysis · doi:10.1017/s0022109017000084 · Cited by 48
Self-citationShare repurchases and institutional supply
DeLisle, R. J., Morscheck, J., & Nofsinger, J. R. (2014) · Journal of Corporate Finance · doi:10.1016/j.jcorpfin.2014.05.010 · Cited by 20
Cited by
Working capital financing and corporate profitability of Indian manufacturing firms
Panda, A. K., & Nanda, S. (2018) · Management Decision · doi:10.1108/md-07-2017-0698 · Cited by 75
Metadata
- Authors
- Bonaimé, A. A., Hankins, K. W., & Jordan, B. D.
- Affiliations
- University of Arizona (US)
- University of Kentucky (US)
- Corresponding author
- Bonaimé, Alice A.
- Hankins, Kristine W.
- Jordan, Bradford D.
- Venue
- Journal of Corporate Finance
- Publisher
- Elsevier BV
- Published
- 2016-06
- Volume
- 38
- Pages
- 345-362
- ISSN
- 0929-1199 (ISSN-L)
- OpenAlex
- W3123392363
- Cited by
- 68
- References
- 34
- Citations by year
- 2026: 2 · 2025: 11 · 2024: 7 · 2023: 10 · 2022: 6 · 2021: 8 · 2020: 7 · 2019: 9 · 2018: 5 · 2017: 2
- FWCI
- 18.20
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Licence
- www.elsevier.com/tdm/userlicense/1.0/ (tdm)
- Locations
- Journal of Corporate Finance (publishedVersion)
- SSRN Electronic Journal (acceptedVersion)
- UA Campus Repository (The University of Arizona) (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Corporate Finance and Governance
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Social Sciences › Business, Management and Accounting › Accounting › Auditing, Earnings Management, Governance
- Keywords
- share repurchases, financial flexibility, dividend policy, earnings management, managerial entrenchment, institutional monitoring
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
