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Corporate insider trading in Europe

Author

Listed:
  • Aussenegg, Wolfgang
  • Jelic, Ranko
  • Ranzi, Robert

Abstract

We analyse stock price behaviour around the disclosure of corporate insider transactions after the introduction of the Market Abuse Directive (MAD). Ranking according to our Insider Trading Enforcement (ITE) index highlights significant differences in the MAD enforcement between French and German legal origin countries. We document contrarian behaviour of insiders in all of the sample countries. Insiders reveal significant information to the public through both their purchases and sales. The price impact of the insiders’ transactions is particularly strong in countries with a lower ITE index (i.e. weaker public enforcement).

Suggested Citation

  • Aussenegg, Wolfgang & Jelic, Ranko & Ranzi, Robert, 2018. "Corporate insider trading in Europe," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 54(C), pages 27-42.
    • Handle: RePEc:eee:intfin:v:54:y:2018:i:c:p:27-42
    DOI: 10.1016/j.intfin.2017.05.004
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    Citations

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    Cited by:

    1. Baumöhl, Eduard & Iwasaki, Ichiro & Kočenda, Evžen, 2019. "Institutions and determinants of firm survival in European emerging markets," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 431-453.
    2. Ann-Ngoc Nguyen & Viet Le & Andros Gregoriou & David Kernohan, 2024. "Insider Trading before Earnings News: The Role of Executive Pay Disparity," JRFM, MDPI, vol. 17(10), pages 1-36, October.
    3. Viet Phuong Le & Ann‐Ngoc Nguyen & Andros Gregoriou, 2024. "Insider trading, gender diversity within the board room, CEO pay gap, and stock price crash risk," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 1378-1400, April.
    4. Bessler, Wolfgang & Vendrasco, Marco, 2022. "Short-selling restrictions and financial stability in Europe: Evidence from the Covid-19 crisis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).

    More about this item

    Keywords

    Insider trading; Disclosure; Public enforcement; Crisis; Contrarian investors;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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