Abstract
The past studies only separately examine the determinants of repurchase decision and those of repurchase amount. In practice, however, firms are very likely to consider the two decisions simultaneously. Therefore, prior studies probably ignore the characteristics of simultaneous decision, leading to suspicious conclusions. We consider both the decision and the amount of stock repurchase, and use the panel data model to analyze the determinants of stock repurchases. Second, we test whether the company’s managers make use of inside information in the timing of repurchase decision. We find that the decision whether to repurchase is correlated with the decision how much to repurchase, therefore the omission of either one decision when analyzing the data could lead to difference result. Second, we find cash ratio, leverage, and MB ratio are the most important factors in firm’s decision of repurchase. In addition, leverage play the key role when determining the dollar amount of repurchase. That is, financial structure is firm’s main concern when facing the repurchase decision. Moreover, we also find the larger firm size is, the greater amount of stock firm repurchase Finally, we find earning shock is not significantly associated with stock repurchases, suggesting that earnings shock plays no role in the decision of repurchase.