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Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/82586
- Takeover deterrent effect of on-market share buyback in Australia
- Doan, Dong Hai Trieu; Yap, Chee Jin; Gannon, Gerard L.
- This study examines whether Australian firms use on-market share buybacks to deter unwanted takeover risk from the stock market. We found a statistically significant and positive relation between a firm's ex-ante takeover probability and its on-market share buyback activities. The result is robust to alternative modelling techniques, namely TOBIT and Censored Quantile Regressions. Our studies supported the hypothesis by Brown and O'day (2007) on dividend payout, that in a non-classical taxation system like Australia, yield of share buyback is positively related to dividend payments. However on-market share buyback activity is closely related to temporary cash flows rather than permanent operating cash flows. This might indicate that besides dividend payments, Australian firms might take advantage of the financial flexibility of share buybacks to redistribute non-permanent cash 'flows to their shareholders.
- Publication type
- Conference paper
- Research centre
- Swinburne University of Technology. Faculty of Higher Education, Lilydale
- Proceedings of 'Value Creation and Management: Vision for the 2010s', the 17th Annual Conference on Pacific Basin Finance, Economics, Accounting and Management (PBFEAM 2009), and 3rd International Conference on Business in Asia (iCBA 2009), Bangkok, Thailand, 01-02 July 2009
- Publication year
- Publisher URL
- Copyright © 2009 the 17th PBFEAM and 3rd iCBA.