07/02/2026
Stock repurchases (firms buying back their own stocks) can create value for shareholders, but they may also carry unintended strategic costs. A new research study co-authored by Yuan Wen, Assistant Professor in the College of Business and Management at the University of Illinois Springfield, highlights an important trade-off: firms that prioritize stock buybacks may inadvertently weaken their marketing capabilities, which can ultimately hurt long-term firm performance. The effect appears even more pronounced in highly competitive markets, where strong marketing capabilities are essential for sustaining competitive advantage.
For managers, the message is clear: financial decisions should not come at the expense of investments that build customer relationships, brand equity, and market capabilities. Sustainable performance requires balancing short-term financial objectives with long-term strategic investments.
This study published in reputed European Journal of Marketing, and you can access the full paper here: https://www.emerald.com/ejm/article-abstract/58/10/2358/1230579/The-dark-side-of-stock-repurchases-do-they-affect?redirectedFrom=fulltext