Insider opportunistic trading through fast sales: Evidence from China

Shiyan Du, Wenlian Lin and Jingchen Pan

Pacific-Basin Finance Journal, 2024, vol. 86, issue C

Abstract: Using a sample of insider sales from firms listed on China's A-share market from 2010 to 2023, we provide robust evidence that insiders engage in fast sales when stocks have better pre-sale performance, compared to slow sales. Additionally, these fast sales predict lower abnormal returns in both the short and long term. Insider opportunistic trading through fast sales is more prominent in firms with high levels of information asymmetry and among insiders facing intense information competition. We find weak evidence that independent directors, institutional investors, and analyst coverage play a role in reducing such insider opportunistic trading. Finally, insider opportunistic trading through fast sales also predicts subsequent stock price crashes and extremely negative earnings news. Our findings help decipher the information content of insider sales in China's market.

Keywords: Insider opportunistic trading; Fast sales; Emerging stock markets (search for similar items in EconPapers)
JEL-codes: G12 G14 G30 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X24001884
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:86:y:2024:i:c:s0927538x24001884

DOI: 10.1016/j.pacfin.2024.102437

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

More articles in Pacific-Basin Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().