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Payment to Investors Policy Choice: US Market Research

Author

Listed:
  • Varvara V. Nazarova

    (HSE University, Saint Petersburg 190121, Russian Federation)

  • Anastasia A. Ivanova

    (HSE University, Saint Petersburg 190121, Russian Federation)

Abstract

In recent years, US share buyback costs have hit record highs, in part due to the 2017 Tax Reform, shareholder activities and record low borrowing costs. The purpose of the present study is to explore the reasons for choosing a policy of payments to investors in American companies and the impact of share buybacks on the results of companies and the economic system. The study reviews traditional theories that explain the choice of investor payout policy. The authors have highlighted the main motives of companies when making decisions on the payment mechanism. After examining the existing theoretical aspects of the choice of payment policy and the trend of US buybacks, a panel data regression analysis of is carried out to comprehensively investigate the causes and consequences of the choice of payment policy. The study identifies managements’ motives for the share buyback and demonstrates the positive impact of share buybacks on the company’s development.

Suggested Citation

  • Varvara V. Nazarova & Anastasia A. Ivanova, 2022. "Payment to Investors Policy Choice: US Market Research," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 89-107, February.
    • Handle: RePEc:fru:finjrn:220106:p:89-107
    DOI: 10.31107/2075-1990-2022-1-89-107
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    dividend payment policy; buyback; capital requirements; reinvestment; economic growth; share buyback programs;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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