DO INSIDER TRADING LAWS MATTER? SOME PRELIMINARY COMPARATIVE EVIDENCE

Laura Nyantung Beny ()

No wp741, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: Despite the longstanding insider trading debate, there is little empirical research on insider trading laws, especially in a comparative context. The article attempts to fill that gap. I find that countries with more prohibitive insider trading laws have more diffuse equity ownership, more accurate stock prices, and more liquid stock markets. These findings are generally robust to controlling for measures of disclosure and enforceability and suggest that formal insider trading laws (especially their deterrent components) matter to stock market development. The article suggests further avenues of empirical research on the specific mechanisms through which insider trading laws might matter and the political economy of their adoption.

Keywords: Insider trading law; Market efficiency; Ownership structure; Law and finance; Comparative capital markets (search for similar items in EconPapers)
JEL-codes: G14 G15 G18 G32 K22 (search for similar items in EconPapers)
Pages: pages
Date: 2005-01-01
New Economics Papers: this item is included in nep-acc, nep-fin, nep-law, nep-reg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (59)

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