Corporate life cycle and share repurchases: Evidence from the Taiwan Stock Market Yi-

Abstract

This study investigated the relationship between corporate life cycle and the determinants of firms’
repurchasing decisions. Our sample firms were gathered from the Taiwan Stock Market over the period
2000 to 2009. This study used the life cycle descriptors and cluster analysis to determine firm years’ life
cycle stages. The results showed that signaling information is the general reason for share
repurchases, regardless of life cycle stages. In the growth stage, firms’ repurchase decisions may mix
different motivations, including undervaluation information signaling. In the mature stages, firms not
only distribute excess cash flow to stockholders but also signal information that agency problem will be
reduced by repurchases. In the stagnant stage, the reasons for repurchase decisions are not explicit.
Key words: , , ,.