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Reactions to corporate insider’s transactions: Do legal stock market disclosure rules have an impact?

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  • Caspar Rose
  • Nicolai Søpstad

Abstract

We test the impact on security prices of top manager’s requirement’s to disclose their own share transactions in the firm. Specifically we study whether buy or sales transactions convey relevant information for market participants thereby studying the effects of legal stock market disclosure rules. Based on a comprehensive collection of stock market announcements from Danish CEOs and chairmen we find that insiders’ transactions influence share prices. However, it appears that there is a surprisingly difference, as buy transactions by chairmen have a much higher impact compared to CEO transactions, which to our knowledge have not been noticed already by others. Thus, our event study shows that the Danish stock market seems to be efficient in the semi-strong from. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Caspar Rose & Nicolai Søpstad, 2015. "Reactions to corporate insider’s transactions: Do legal stock market disclosure rules have an impact?," European Journal of Law and Economics, Springer, vol. 40(2), pages 247-272, October.
    • Handle: RePEc:kap:ejlwec:v:40:y:2015:i:2:p:247-272
    DOI: 10.1007/s10657-014-9475-7
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    Cited by:

    1. R. Ferretti & P. Pattitoni & R. Patuelli, 2016. "Market Abuse Directive and Insider Trading: Evidence from Italian Tender Offers," Working Papers wp1071, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Riccardo Ferretti & Pierpaolo Pattitoni & Roberto Patuelli, 2021. "Insider Trading and the Market Abuse Directive: Are Voluntary and Mandatory Takeover Bids Different?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 7(3), pages 461-485, November.

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    More about this item

    Keywords

    Disclosure rules; Insider’s transactions; Event study; Signaling and stock market efficiency; K10; K14; K22; M20; G30;
    All these keywords.

    JEL classification:

    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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