International equity portfolio investment and enforcement of insider trading laws: a cross-country analysis

Frank O. Kwabi (), Agyenim Boateng () and Emmanuel Adegbite ()
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Frank O. Kwabi: De Montfort University
Agyenim Boateng: De Montfort University
Emmanuel Adegbite: The University of Nottingham

Review of Quantitative Finance and Accounting, 2019, vol. 53, issue 2, No 1, 327-349

Abstract: Abstract In this study, we examine the effects of stringent insider trading laws’ enforcement, institutions and stock market development on international equity portfolio allocation using data from 44 countries over the period 2001–2015. Our results suggest that stringent insider trading laws and their enforcement exert a positive and significant impact on international portfolio investment allocation. Further analysis indicates that the interaction between a country’s institutional quality, stock market development and enforcement of insider trading laws have a positive and significant effect on international equity portfolio allocation. The findings of this study have implications for the design of portfolio investment trading strategies and contribute to the literature on foreign equity investment decisions.

Keywords: Insider trading laws; Institutional quality; Stock market development; Foreign equity portfolio flows (search for similar items in EconPapers)
JEL-codes: F3 G11 G14 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s11156-018-0751-4

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