EconPapers    
Economics at your fingertips  
 

Stock Market Trading in the Aftermath of an Accounting Scandal

Renuka Sane ()

Working Papers from National Institute of Public Finance and Policy

Abstract: In this paper, I study the impact of fraud revelation on trading behaviour of investors. I ask if investors with direct exposure to stock market fraud (treated investors) are more likely to cash out of the stock market than investors with no direct exposure to fraud (control investors)? Using daily investor account holdings data from the National Stock Depository Limited (NSDL), the largest depository in India, I find that treated investors cash out almost 10.6 percentage points of their overall portfolio relative to control investors post the crisis. The cashing out is largely restricted to the bad stock. Over the period of a month, there is no difference in the trading behaviour of the treated and control investors. This paper, for the first time, is able to capture trading behaviour on a daily basis for an extended period of time instead of basing the analysis on household survey data, or observing investors at monthly or yearly frequency.

Keywords: fraud; stock market trading; individual investors; India (search for similar items in EconPapers)
JEL-codes: D1 G1 G3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mst
Date: 2018-04
Note: Working Paper 198, 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.nipfp.org.in/media/medialibrary/2018/04/WP_2018_198.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 401 Unauthorized

Related works:
Working Paper: Stock Market Trading in the Aftermath of an Accounting Scandal (2018) Downloads
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:npf:wpaper:18/198

Access Statistics for this paper

More papers in Working Papers from National Institute of Public Finance and Policy
Bibliographic data for series maintained by S.Siva Chidambaram ().

 
Page updated 2019-08-16
Handle: RePEc:npf:wpaper:18/198