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Do bank ties influence stock repurchases in a bank-based financial system during financial distress? A pre-registered study

Author

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  • Sakawa, Hideaki
  • Watanabel, Naoki
  • Uchida, Konari

Abstract

This pre-registered study implements the empirical analyses approved in the pre-registered report (Sakawa et al., 2024) to reveal the effects of bank ties on both corporate repurchase decisions and stock price reactions to buyback announcements. Using the COVID-19 pandemic as an exogenous shock, our study offers three key findings. First, main banks with shareholder views tend to promote stock repurchase decisions of their client firms during the pandemic. Second, the announcement effect of stock repurchases is smaller for firms with (vs. without) a main bank relationship during the COVID-19 pandemic. Finally, stock repurchases of financially constrained firms with main bank relationships are supported by the cash-holding view of their main banks. These findings provide a deeper understanding of how extreme financial distress, like that which occurred during the COVID-19 pandemic, affects the motive for stock repurchase in financially constrained firms.

Suggested Citation

  • Sakawa, Hideaki & Watanabel, Naoki & Uchida, Konari, 2026. "Do bank ties influence stock repurchases in a bank-based financial system during financial distress? A pre-registered study," Pacific-Basin Finance Journal, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:pacfin:v:96:y:2026:i:c:s0927538x25003555
    DOI: 10.1016/j.pacfin.2025.103018
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