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- W1972040282 abstract "Purpose Most research on share repurchases is based on the USA. Recently, the rate of share repurchases by UK companies has increased significantly; such a marked increase in activity would suggest a change in strategic factors generating this activity. This paper aims to focus on UK practice, the motivations of UK companies to repurchase shares and compares similar research in the USA. Design/methodology/approach Strategic motives for share repurchase activity are examined by a questionnaire survey of the finance directors of the top UK 200 companies. The outcome is compared to equivalent US research. The theoretical underpinning of the survey is based on six prominent hypotheses from the academic literature. Findings The results indicate that a primary motive of share repurchases in the UK is to achieve an optimal capital structure, and that the requirement to cancel shares is fundamental to buy‐back decisions in the UK. Research limitations/implications USA/UK comparison has limitations, nevertheless it highlights differences and possible reasons. A follow‐up study in the current market conditions may give further clarity. Also, a survey of smaller quoted companies may further enhance our understanding of the motives. Practical implications The likelihood is of this trend being maintained, especially in view of legal development. Originality/value Individual respondents indicated that finance directors have a genuine interest in this topic and that further research would be beneficial in both practical and academic use. Share buy‐backs can be an effective part of the overall strategy of a company, however the effects of a repurchase are ultimately short term." @default.
- W1972040282 created "2016-06-24" @default.
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- W1972040282 date "2008-10-17" @default.
- W1972040282 modified "2023-09-26" @default.
- W1972040282 title "An empirical survey of the motivation for share repurchases in the UK" @default.
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- W1972040282 doi "https://doi.org/10.1108/03074350810915833" @default.
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