The integration of share repurchases into investment decision-making: Evidence from Japan

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This study holds crucial significance as it navigates the complex relationship between share repurchases and investment within the context of the evolving Japanese market. By uncovering a negative correlation between these practices, it addresses the ongoing debate surrounding the impact of share buybacks on investment decisions. The findings, particularly considering varying factors like financing constraints, growth opportunities, and cross-shareholdings, offer valuable insights into how firms prioritize and adjust their investment strategies concerning share repurchases. Furthermore, by spotlighting the influence of unique market traits like cross-shareholdings, this study contributes to a deeper understanding of how specific market dynamics shape the interplay between investment and share repurchases. Understanding these dynamics is crucial for investors, policymakers, and corporate leaders seeking to comprehend the implications of share buybacks on investment strategies, especially within markets characterized by distinctive features like Japan's cross-shareholding tradition.

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