Corporate insider trading and extreme weather events: Evidence from tropical storms in the US

Ihtisham A. Malik, Allan Hodgson, Robert W. Faff and Zhengling Xiong

International Review of Financial Analysis, 2025, vol. 104, issue PA

Abstract: This study examines whether and to what extent insiders exploit their informational advantage, surrounding extreme weather events. Adopting the US as our context, we find that public and private related tropical-storm information provides insiders with profitable buying opportunities, notably higher in the pre-landfall period and for executives. Our results suggest that insiders not only process meteorological forecasts more efficiently, but they also have superior private information advantages when compared to general investors who are inclined to negatively overreact to weather disasters.

Keywords: Insider trading; Extreme weather events; Information asymmetry (search for similar items in EconPapers)
JEL-codes: D81 G10 G14 Q54 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925003709

DOI: 10.1016/j.irfa.2025.104283

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