• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
    • Executive Editor: Ms. Fiona Chu
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HOME > Archive > 2021 > Volume 9 Number 1 (Mar. 2021) >
JOEBM 2021 Vol.9(1): 9-14 ISSN: 2301-3567
DOI: 10.18178/joebm.2021.9.1.647

Stock Buyback: Toxic Cure for the Company to Get out the Dilemma

Zhen Li and Xiaoyang Li

Abstract—Buyback behavior is now flourishing in China’s A-share market. In order to investigate whether the influence of buyback behavior can help the companies to improve its corporate performance, we examine the performance and debt-paying ability of the companies after launching the buyback action. The resource-based theory is used following the common assumption that limited resources of the company in the short run. 119 company’s financial information from 2006 to 2014 are collected from SZSE (Shenzhen Stock Exchange), SSE (Shanghai Stock Exchange) and easteconomy.com. Then it is possible to test the correlation using OLS. After the regression analysis on the data, we come to the conclusion that stock buyback is negative to the companies’ performance and will impose a negative impact on the debt-paying ability.

Index Terms—A-share market, debt-paying ability, short-term performance, stock buyback.

Zhen Li is with Changsha University of Science and Technology, China (e-mail: danielleon123@163.com). Xiaoyang Li is with Nanyang Technological University, Singapore (e-mail: lxymichael9494@gmail.com).

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Cite:Zhen Li and Xiaoyang Li, "Stock Buyback: Toxic Cure for the Company to Get out the Dilemma," Journal of Economics, Business and Management vol. 9, no. 1, pp. 9-14, 2021.

Copyright © 2021 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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