Date of Graduation
5-2026
Document Type
Thesis
Degree Name
Bachelor of Science in International Business
Degree Level
Undergraduate
Department
Economics
Advisor/Mentor
Arya Gaduh
Abstract
Abstract:
This thesis uses basic econometrics to examine the relationship between stock buybacks, firm valuation, and investment among publicly traded firms from 2000-2024. Using firm-level data pulled from Compustat North America and a fixed-effect multivariate regression, it evaluates whether buybacks are associated with higher valuation and stronger productive investment as defined in the paper. The results show that buybacks are positively associated with firm valuation the first year that they occur, but the relationship disappears when they are lagged for a year. Furthermore, the analysis does not find strong statistical evidence that repurchases are associated with changes in investment, or at least how it is measured in this study. Finally, the findings suggest that the most visible effect of buybacks in the sample measured is financial rather than operational, contributing to the broader debate over their use in modern corporate finance.
Keywords
Regression Analysis; Stock Buybacks; Corporate Governance; Market Valuation; Compustat
Citation
Serrano, T. H. (2026). Manipulation or Monetization?: The Rise of Stock Buybacks and their Effects on Firm Valuation and Investment. Economics Undergraduate Honors Theses Retrieved from https://scholarworks.uark.edu/econuht/81
