Cross-Border Activities as a Source of Information: Evidence from Insider Trading during the COVID-19 Crisis

Leandro Sanz
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Leandro Sanz: Ohio State University

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: Insider trading during the early months of the COVID-19 pandemic provides a unique opportunity to study how corporate insiders benefit from information flows in their network of business contacts. I find that insiders at firms with activities in China sell more shares of their companies than other insiders and do so earlier. Consistent with an information channel, I show that firms with supply-chain relationships and subsidiaries in China, more local assets and employees, and insiders overseeing global operations drive these effects. Insiders' private information seems to have been forward-looking, which allowed them to avoid significant losses during the period.

JEL-codes: D83 D85 F23 G14 (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-cna, nep-cwa and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2021-20

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