Peer Influence On Repurchase Policies

The report of the 19th National Congress pointed out that the current financial risk hidden dangers are the structural imbalance of the real economy and the ability of countercyclical regulation,the lack of openness of financial enterprise governance and the financial industry,and the mirror reflection of the defects of the regulatory system.As the financial industry becomes more open,there are more and more tools for domestic capital markets to hold risks.Referring to the foreign capital market,from 2008 to 2018,US listed companies spent a total of 5.1 trillion US dollars to repurchase,stock repurchase is considered to be an important driving force for US stocks to rise.Therefore,with the gradual opening of China's financial industry,share repurchase can maintain the capital market order,and the release of financial risks will have important research significance.This paper takes China listed companies from 2013 to 2017 as a sample to explore whether the repurchase policy of companion companies will affect the repurchase of the enterprise,in addition to the factors affecting its own repurchase policy.The research finds:(1)The repurchase policy of the peer enterprise will significantly affect the repurchase policy of the enterprise,and the repurchase amount of the peer enterprise will also have a significant impact on the repurchase amount of the enterprise;(2)By regressing the company by size and establishment time,The larger companion company has a significantly better peer effect than the smaller companies,and the companion effect of the long-established companies is significantly shorter than that of the short-term companies;(3)By introducing interactive terms to explore the specific ways of peer effects,it is found that R&D expenses can enhance the peer effect in repurchase.The reason for the above results may be the signal theory and competition theory of peer effects,that is,enterprises have information disadvantage due to information asymmetry.In order to maintain the comparative advantage,one party imitates a company with more information advantages;or because the company has a competitive relationship with its companion companies,it maintains its market share by imitating or even surpassing its competitors' behavior,forming long-term and dynamic competition.According to the results of this paper,we put forward the following suggestions:(1)When formulating the policy of share repurchase,we need to pay attention to the interrelationship of the repurchase decision of the company.The management of share repurchase should pay attention to the size and establishment time of the enterprise.Appropriately increase the guidance of repurchasing behavior of small-scale or short-established enterprises in the capital market,and give certain policy support.(2)Since R&D expenses strengthen the role of peers,it can be noticed when formulating policies.Companies with higher R&D costs have a role in driving,and they have certain support for companies with lower R&D costs.