Does Labor Power Affect the Likelihood of a Share Repurchase?. Issue 3 (4th June 2015)

• Record Type: Journal Article
• Authors: Chen, Sheng‐Syan; Chen, Yan‐Shing; Wang, Yanzhi
• Is Part Of: Financial management. Volume 44:Issue 3(2015:Autumn)
• Page Start: 623
• Page End: 653
• Publication Date: 2015-06-04
• Subjects: Corporations -- Finance -- Periodicals; 658.1505
• DOI: 10.1111/fima.12072
• Languages: English
• ISSNs: 0046-3892

Abstract

<abstract abstract-type="main"> <title> <x xml:space="preserve">Abstract</x> </title> <p>This research examines the impact of labor power on the firm's repurchase decisions. Firms facing stronger labor power repurchase fewer shares, suggesting that, on average, repurchases are against the interests of labor. However, the negative effect of labor power on repurchases is significantly reduced when repurchases benefit employees by fending off an unwanted takeover or countering the dilution effects of employee stock options. We also examine the ex post consequences of share repurchases. Repurchases are positively related to the probability of a strike. Repurchase announcement returns and the operating performance of repurchasing firms are negatively related to labor power.</p> </abstract>