Journal article
Does insider trading regulation deter private information trading? International evidence
Pacific-Basin finance journal, Vol.15(5), pp.409-433
11/2007
DOI: 10.1016/j.pacfin.2006.10.003
Abstract
Using a sample of 2189 firms from 21 countries we find that, on average, stricter insider trading regulations reduce private information trading. However, for firms with high agency costs, insider trading restrictions are less effective in deterring private information trading. We suggest that controlling shareholders who are banned from trading may resort to covert expropriation of firm resources thereby reducing transparency and increasing the returns to private information trading. Consistent with this, we find that firms with higher agency costs located in countries with stricter insider trading laws have more opaque earnings and are valued lower.
Details
- Title: Subtitle
- Does insider trading regulation deter private information trading? International evidence
- Creators
- Art A. Durnev - McGill UniversityAmrita S. Nain - McGill University
- Resource Type
- Journal article
- Publication Details
- Pacific-Basin finance journal, Vol.15(5), pp.409-433
- Publisher
- Elsevier B.V
- DOI
- 10.1016/j.pacfin.2006.10.003
- ISSN
- 0927-538X
- eISSN
- 1879-0585
- Language
- English
- Date published
- 11/2007
- Academic Unit
- Finance
- Record Identifier
- 9984380526902771
Metrics
10 Record Views