Insider Trading, News Releases and Ownership Concentration

J. Fidrmucova, M. Goergen, L.D.R. Renneboog

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Abstract

This paper investigates the market's reaction to UK insider transactions and analyzes whether the reaction depends on the firm's ownership.There are three major findings.First, differences in regulation between the UK and US, in particular the speedier reporting of trades in the UK, may explain the observed larger abnormal returns in the UK.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 & acquisitions and CEO replacements contain significantly less information.
Original languageEnglish
Place of PublicationTilburg
PublisherFinance
Number of pages49
Volume2005-97
Publication statusPublished - 2005

Publication series

NameCentER Discussion Paper
Volume2005-97

Keywords

  • corporate governance
  • directors' share dealings
  • ownership and control
  • insider trading

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