Disaster response: The COVID-19 pandemic and insider trading around the world

Khanh Hoang, Cuong Nguyen, Harvey Nguyen and Lai Van Vo

Global Finance Journal, 2023, vol. 56, issue C

Abstract: This paper investigates how corporate insiders respond to the initial COVID-19 outbreaks. Using comprehensive insider transaction data from 25 countries, we document a consistent pattern of insider selling during the month after the first COVID-19 case is confirmed in a given country. Insider selling during these disease outbreaks is less pronounced in countries with higher information disclosure requirements, higher public enforcement index, a more efficient judiciary system, and stronger investor protection. Furthermore, cultural differences and the stringency levels of government responses to the COVID-19 outbreaks help moderate insider panic selling when health disasters strike. The findings suggest that a transparent, reliable business system contributes to rebuilding investor trust and corporate resilience during crises.

Keywords: COVID-19 pandemic; Health crises; Insider trading; Pandemic responses; Investor trust; Crisis management (search for similar items in EconPapers)
JEL-codes: D8 G14 G15 G18 H12 I18 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:56:y:2023:i:c:s1044028323000091

DOI: 10.1016/j.gfj.2023.100814

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