Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)

Analysis of Firms’ Share Repurchases ‘Causation: A Case Study of Starbucks

Authors
Kangxin Chen1, *, , Meiying Li2, , Zifeng Tang3,
1School of Economics Capital University of Economics and Business Beijing 100070 China
2Century College, Beijing University of Posts and Telecommunications Beijing 100070 China
3School of Economic and Management, Guangzhou College of Applied Science and Technology, Guangzhou,510000, China

These authors contributed equally.

*Corresponding author. Email: guanghua.ren@gecacdemy.cn
Corresponding Author
Kangxin Chen
Available Online 15 December 2021.
DOI
10.2991/assehr.k.211209.023How to use a DOI?
Keywords
Share repurchase; Internal factors (motivation); External factors; Starbucks
Abstract

This article explores the internal and external motivations of company’s repurchase decision. In terms of methods, the author uses a combination of theory and empirical research methods and logically uses an analysis process from general rules to special cases to make the conclusions more accurate and have practical meaning. In the research process, the article firstly makes a theoretical analysis, summarizing and expanding various hypotheses about corporate share repurchase motives put forward by predecessors. In addition to analyzing the common signal transmission hypothesis, management incentive hypothesis, and other internal factors, the author also added external factors such as share liquidity and volatility, making the theoretical analysis more comprehensive and innovative. At the same time, to make the research more specific, this article selects Starbucks, a representative company, to analyze its repurchase behavior. In the case analysis, the article at first gives concrete indicators and indexes of each hypothesis based on theoretical research, transforming the qualitative analysis into quantitative research, making the research process clearer and more specific. The article selects Starbucks’ financial data from 2009 to 2020 and obtains the corresponding indicator values through integration and calculation. Finally, to increase the conclusions’ accuracy, the article selected several main factors through the previous analysis to conduct an empirical test and used Eviews software to perform regression analysis on time series data such as the number of share repurchases and company share prices. The regression results show that a company’s number of shares repurchases is negatively correlated with the share price growth rate. The significance level is the highest, proving that the main motivation for corporate share repurchases is to increase the share price. Finally, this article summarizes Starbucks’ share repurchase behavior based on relevant analysis results and non-financial information. It provides suggestions for other companies’ share repurchase decisions, which have practical value.

Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
15 December 2021
ISBN
978-94-6239-483-4
ISSN
2352-5428
DOI
10.2991/assehr.k.211209.023How to use a DOI?
Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

Cite this article

TY  - CONF
AU  - Kangxin Chen
AU  - Meiying Li
AU  - Zifeng Tang
PY  - 2021
DA  - 2021/12/15
TI  - Analysis of Firms’ Share Repurchases ‘Causation: A Case Study of Starbucks
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 142
EP  - 151
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.023
DO  - 10.2991/assehr.k.211209.023
ID  - Chen2021
ER  -