Insider trading and networked directors

Marc Goergen, Luc Renneboog, Yang Zhao

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We analyze the relation between insider trading and the networks of executive and non-executive directors in UK listed companies. While most existing studies focus on firm-specific private information, we find that non-firm-specific information – such as information on other companies and information on industry and market trends – plays an important role in insider trading behavior and performance. Well-connected directors trade shares less frequently and for smaller values. However, their transactions are more profitable, especially when they make consecutive opportunistic purchases in the multiple companies on whose boards they sit. Taken together, well-connected directors are likely to outperform their peers with inferior connections.
LanguageEnglish
Pages152-175
JournalJournal of Corporate Finance
Volume56
DOIs
Publication statusPublished - Jun 2019

Fingerprint

Insider trading
Industry
Trading behavior
Peers
Non-executive directors
Private information
Purchase
Listed companies

Keywords

  • Insider trading
  • Director networks
  • Network analysis
  • Centrality
  • Opportunistic Trading
  • Routine trading

Cite this

Goergen, Marc ; Renneboog, Luc ; Zhao, Yang. / Insider trading and networked directors. In: Journal of Corporate Finance. 2019 ; Vol. 56. pp. 152-175.
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Insider trading and networked directors. / Goergen, Marc; Renneboog, Luc; Zhao, Yang.

In: Journal of Corporate Finance, Vol. 56, 06.2019, p. 152-175.

Research output: Contribution to journalArticleScientificpeer-review

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