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Investor relations activities and insider trading: Evidence from China

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  • Wang, Xiaoyan

Abstract

This paper examines the impact of investor relations (IR) activities involving different market participants on the listed firms’ insiders’ information acquisition and informed trading behavior. Using IR activities data of SZSE-listed firms from July 2012 to December 2021, we find that it seems that IR activities with insider trading have higher information content, especially those involving the participation of sell-side analysts or mutual fund managers. By properly timing trades according to their foreknowledge of these activities, insiders can significantly improve their returns. Our results highlight that the sell-side analysts and mutual fund managers play the crucial roles in facilitating insiders’ informed trading.

Suggested Citation

  • Wang, Xiaoyan, 2023. "Investor relations activities and insider trading: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007584
    DOI: 10.1016/j.frl.2023.104386
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    References listed on IDEAS

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    1. Lauren Cohen & Andrea Frazzini & Christopher Malloy, 2010. "Sell‐Side School Ties," Journal of Finance, American Finance Association, vol. 65(4), pages 1409-1437, August.
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    6. Shasha Liu & Yunhao Dai & Dongmin Kong, 2017. "Does It Pay to Communicate with Firms? Evidence from Firm Site Visits of Mutual Funds," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 44(5-6), pages 611-645, May.
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    Cited by:

    1. Zhou, Biao & Cheng, Linting & Liu, Xiaofei, 2024. "QFII shareholding, information access and corporate asset mismatching," Finance Research Letters, Elsevier, vol. 61(C).

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