2012 Fiscal Year Final Research Report

The wealth transfer effect of share repurchases

Research Project

Project/Area Number	22730252
Research Category	Grant-in-Aid for Young Scientists (B)
Allocation Type	Single-year Grants
Research Field	Public finance/Monetary economics
Research Institution	Kobe University
Principal Investigator	HATAKEDA Takashi 神戸大学, 大学院・経営学研究科, 准教授 (90319898)
Project Period (FY)	2010 – 2012
Keywords	自社株買い / 利益マネジメント / 収益性 / 配当の硬直性 / 富の移転
Research Abstract	The purposes of this research are, first of all, to clarify characteristics of Japanese firms’ payout policy (dividends and share repurchases). And then the research discusses the wealth transfer problem between firms paying dividends and share repurchases and their shareholders. Some main results are as follows: (1) Japanese firms tend to utilize share repurchases as a complementary method of payout. (2) Japanese firms tend to perform the earning managements before the time when they perform share repurchases. In particular, as far as the changes of firm’s profit variables (ROA), share repurchase are not a signal of firm’s future optimistic profit, but that of firm’s risk. (3) We do not see the smoothing of firm’s dividends for the period between 2003 and 2010. If anything, it seems that Japanese firms perform dividend policy in favor of firm’s profits flexibly. To summarize the results, this research takes a suggestion that there is the wealth transfer problem of share repurchases in Japan.

(4 results)