How insiders utilize their information advantages in their trading: Evidence from China

Wanlong Zhao, Wei Zhang, Xiong Xiong and Gaofeng Zou

Finance Research Letters, 2021, vol. 42, issue C

Abstract: The literature studying insider trading is largely silent on two aspects. The first is the seasonal features of insider trading, and the second is how the nature of information affects insider trading. We find that insider trading is relatively concentrated in the fourth quarter because of the high information advantage. Insiders make trading decisions based on their judgements of future market reactions to annual reports. We find different patterns of information advantage utilization in positive and negative news conditions. We also explore the influence of the market valuation and ownership structure on the utilization of information advantages.

Keywords: Insider trading; Information advantage; Positive news; Negative news; Market reaction (search for similar items in EconPapers)
JEL-codes: G10 G30 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:42:y:2021:i:c:s1544612320316974

DOI: 10.1016/j.frl.2020.101883

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