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Do north–south cultural differences affect share repurchases?—Evidence from China

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  • Huang, Chenghao
  • Zhang, Li
  • Liu, Wenqi

Abstract

This paper investigates how collectivism, reflected in the north–south differences in China’s farming culture, affects share repurchase decisions. Our findings indicate that the chairman’s collectivism significantly promotes share repurchase activity, primarily by mitigating information asymmetry and boosting investor confidence. Additionally, repurchase announcements from southern chairman yield higher announcement returns, and these chairmen increased repurchases during the COVID-19 pandemic. Moreover, north–south differences are more pronounced among non-founder chairman and those with lower shareholdings, indicating that collectivism effectively complements entrepreneurial experience and incentives. Furthermore, collectivism increases cash dividends, with no substitution effect between share repurchases and cash dividends. In conclusion, a chairman’s personal characteristics are crucial in repurchase decisions, with collectivism increasing the likelihood of listed companies using share repurchases to protect common interests.

Suggested Citation

  • Huang, Chenghao & Zhang, Li & Liu, Wenqi, 2025. "Do north–south cultural differences affect share repurchases?—Evidence from China," Research in International Business and Finance, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:riibaf:v:80:y:2025:i:c:s0275531925003691
    DOI: 10.1016/j.ribaf.2025.103113
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    Keywords

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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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