This paper examines insider trading activities and their informativeness across 44 countries with varying levels of insider trading regulations. While insider trades, particularly insider purchases, earn abnormal profits in most of the markets we study, insider trading is significantly less informative in countries without active enforcement of insider trading regulations. Examining insider trading around corporate earnings announcements, we find that insiders trade more before earnings
announcements and that stock prices react less to earnings news in countries without active enforcement than in those with active enforcement. Based on the first comparison of insider trading activities under different regulation regimes, our results support the view that effective insider trading regulation promotes price efficiency. Without active enforcement, insider trading not only crowds out market information acquisition and reduces stock price efficiency, but also renders insider
trading itself less informative.
Keywords: Insider Trading, Market Efficiency, Regulation Enforcement, Earnings Announcements
JEL Classification Number: G11, G23, G32
학회소식
[2016년 제 4차] Insider Trading, Informativeness, and Price Efficie
작성자 : 관리자
조회수 : 750
게시일 :
2016-12-21
