Insider trading, news releases, and ownership concentration

Fidrmuc, J. P., Goergen, Marc ORCID: https://orcid.org/0000-0003-4391-2651 and Renneboog, Luc 2006. Insider trading, news releases, and ownership concentration. The Journal of Finance 61 (6) , pp. 2931-2973. 10.1111/j.1540-6261.2006.01008.x

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Abstract

This paper investigates the market's reaction to U.K. insider transactions and analyzes whether the reaction depends on the firm's ownership. We present three major findings. First, differences in regulation between the U.K. and United States, in particular the speedier reporting of trades in the U.K., may explain the observed larger abnormal returns in the U.K. Second, ownership by directors and outside shareholders has an impact on the abnormal returns. Third, it is important to adjust for news released before directors' trades. In particular, trades preceded by news on mergers and acquisitions and CEO replacements contain significantly less information.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HG Finance
Publisher:	Wiley-Blackwell
ISSN:	1540-6261
Last Modified:	22 Mar 2023 15:35
URI:	https://orca.cardiff.ac.uk/id/eprint/37598

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