 Insider trading laws and price informativeness in emerging stock markets: The South African caseKalu Ojah, Stella Muhanji and Odongo Kodongo Emerging Markets Review, 2020, vol. 43, issue C Abstract: We test the view that insider trading deters informativeness and, thereby, provide empirical evidence on the ramifications of insider trading legislation, particularly in an emerging market, that has hitherto received no research attention. Using the difference-in-differences identification strategy, we find that “effective insider trading law” improves stock price informativeness, a reflection of market efficiency, and that this efficiency is robust to both economic factors that affect market efficiency and the choice of control. Importantly, our results support the hypothesis that prohibition of insider trading elicits efficiency enhancement, particularly in emerging markets which are often characterized by weaker requisite institutional infrastructure than developed markets. Keywords: Capital market governance; Insider trading; Stock price informativeness; Market efficiency; Emerging markets; Difference-in-differences; South Africa (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:43:y:2020:i:c:s1566014119304352 DOI: 10.1016/j.ememar.2020.100690 Access Statistics for this article Emerging Markets Review is currently edited by Jonathan A. Batten More articles in Emerging Markets Review from Elsevier |
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