Information asymmetry and insider trading semantic scholar. On the other hand, insider trading is also relevant to the maintenance of ownership and this. Pdf corporate diversification, information asymmetry and. Since information asymmetry is unobservable, we, as econometricians, must. I investigate the impact of information asymmetry on insider trading by a exploiting quasiexperimental design. Information asymmetry and insider trading by wei wu ssrn. This particular type of market interaction allows me to introduce additional information asymmetries in the model by allowing the agent the possibility of interacting with the market and trading into a position without first informing the principal. Information asymmetry and the information content of insider trades. Why insider trading is bad one argument against insider trading is that if a select few people trade on material nonpublic information, the integrity.
On the other hand, because they obtain abnormal profits at the expense of uninformed traders outsiders, large abnormal profits of insiders can raise the alarm. Information asymmetry and the information content of. Information asymmetry and insider trading in family firms. Information asymmetry and insider trading citeseerx. Pdf insider trading disclosure, information asymmetry. Competitive threats, information asymmetry, and insider. Testing the causal impact of information asymmetry on insider trading is an empirical challenge. Insider trading and institutional holdings in seasoned. Competitive threats, information asymmetry, and insider trading. Given little uncertainty, insider trades will convey less information even if an insider s information is more precise. Meanwhile, insiders can trade based on their private information about the firms prospects. Information asymmetry and crosssectional variation in insider. The incremental effect of information asymmetry as well as the interaction with insider trading is also prevalent in this relation, confirming the moderating effect of asymmetric information. Insidertrading, discretionary accruals and information.
Variables that may proxy for information asymmetry are a component of. This paper analyzes the academic and regulatory studies on insider trading available in the finance literature. Therefore, an ols regression between the number of analysts and. Insider trading disclosure, information asymmetry, and differential earnings relevance as indicated by trading volume. The main result of the paper shows that by including an additional source of information asymmetry through the mechanism of insider trading, the probability of. Request pdf information asymmetry and insider trade profitability in india purpose this study aims to measure the magnitude of information asymmetry. Information asymmetry, insider trading, analyst coverage, informed trading.
756 1573 875 1270 555 385 1368 141 1379 214 1050 441 729 1201 282 1107 399 1110 118 947 277 666 1481 1292 532 1455 19