Commitment to social good and insider trading

Feng Gao, Ling Lei Lisic and Ivy Xiying Zhang

Journal of Accounting and Economics, 2014, vol. 57, issue 2, 149-175

Abstract: A firm׳s investment in corporate social responsibility (CSR) builds a positive image of caring for social good and imposes additional costs on executives׳ informed trading, which is widely perceived self-serving. We thus expect executives of CSR-conscious firms to be more likely to refrain from informed trading. We find that executives of CSR-conscious firms profit significantly less from insider trades and are less likely to trade prior to future news than executives of non-CSR-conscious firms. The negative association between CSR and insider trading profits is more pronounced when executives׳ personal interests are more aligned with the interests of the firm.

Keywords: Corporate social responsibility; Insider trading (search for similar items in EconPapers)
JEL-codes: G10 M14 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (103)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:57:y:2014:i:2:p:149-175

DOI: 10.1016/j.jacceco.2014.03.001

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