The Bright Side of Stock Repurchases

55 Pages Posted: 23 Jun 2016 Last revised: 24 Jan 2023

Date Written: November 12, 2017


I provide evidence of actual stock repurchases increasing future investment in firms subject to strong asymmetric information that are reliant on external capital markets. To address endogeneity, I use an instrumental variables approach based on price pressures created by mutual funds' liquidity needs. The results are consistent with firms using actual repurchases to signal their type, which eases access to capital markets and ultimately improves real outcomes.

Keywords: Stock Repurchases, Investment, Instrumental Variables

JEL Classification: G32, G35

Suggested Citation

Rubio, Silvina, The Bright Side of Stock Repurchases (November 12, 2017). Available at SSRN: or

Silvina Rubio (Contact Author)

University of Bristol ( email )

United States

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