Research On Motivation And Economic Consequences Of Share Repurchase Of Listed Companies

Share repurchase originated in the western capitalist market.The common law countries use it to replace dividend payment and prevent malicious acquisition.It's an important financial tool.It plays an important role in optimizing the capital structure of enterprises,improving stock prices and improving corporate governance.In China,share repurchase was prohibited early.It was mainly allowed for state-owned shares to support the reform of non-tradable shares.After reform,the state gradually relaxed the restrictions on share repurchase.The scale of share repurchase have increased.However,the original Company Law stipulates there are a few conditions for allowable repurchase,and the decision-making process is relatively complex.Meanwhile,the repurchased shares are required to be cancelled within a certain period of time,which frustrates the enthusiasm of share repurchase.The role of share repurchase can't be fully played.In recent years,with the increasing frequency of share repurchase,China has further relaxed the restrictions on share repurchase,increased the allowing situation,improved the implementation of decision-making procedures,established stock system,and supported companies to share repurchase.Therefore,it's necessary to study the motivation of share repurchase,the economic consequences of share repurchase and its path.Firstly,this paper combs the relevant institutional background and theoretical basis,and analyses the possible economic consequences of share repurchase and its path.Secondly,the current situation,trend and characteristics of share repurchase in China are summarized.Finally,based on Jiangzhong Phamaceutical Company,from the financial data and events,the paper makes adaptability analysis based on the existing motivation hypothesis,and studies the economic consequences of repurchase combined with the path.It's found that share repurchase has a positive effect on the market effect,governance effect and financial effect of Jiangzhong Phamaceutical Company,which provides a reasonable reference for other listed companies that may carry out share repurchase.