The information content of insider trading: Evidence from China

Ying Qiu, Hua He and Gang Xiao

Finance Research Letters, 2018, vol. 26, issue C, 126-131

Abstract: We examine the source of return predictability by insider trading in the setting of China’s stock market from 2005 to 2016. We find that insiders’ net share purchase contains favorable information about earnings beyond what is incorporated in the current stock market. We further show that the information contained in insiders trading is about operating rather than the non-operating component of earnings. We also find that firms with significant net share purchase are not associated with lower earnings quality afterwards. Overall, we provide evidence that insider trading delivers significant value-relevant information about earnings to the stock market.

Keywords: Insider trading; Earnings; Information; China’s stock market (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:26:y:2018:i:c:p:126-131

DOI: 10.1016/j.frl.2017.12.007

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