An Empirical Analysis of Legal Insider Trading in the Netherlands

Hans Degryse, Frank de Jong and Jérémie Lefebvre

No 2687, CESifo Working Paper Series from CESifo

Abstract: In this paper, we employ a registry of legal insider trading for Dutch listed firms to investigate the information content of trades by corporate insiders. Using a standard event-study methodology, we examine short-term stock price behavior around trades. We find that purchases are followed by economically large abnormal returns. This result is strongest for purchases by top executives and for small market capitalization firms, which is consistent with the hypothesis that legal insider trading is an important channel through which information flows to the market. We analyze also the impact of the implementation of the Market Abuse Directive (European Union Directive 2003/6/EC), which strengthens the existing regulation in the Netherlands. We show that the new regulation reduced the information content of sales by top executives.

Keywords: insider trading; financial market regulation (search for similar items in EconPapers)
JEL-codes: G14 G28 K22 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: An Empirical Analysis of Legal Insider Trading in The Netherlands (2014)
Working Paper: An Empirical Analysis of Legal Insider Trading in the Netherlands (2009)
Working Paper: An Empirical Analysis of Legal Insider Trading in the Netherlands (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2687

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