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Insider Trading, News Releases and Ownership Concentration

Author

Listed:
  • Fidrmucova, J.

    (Tilburg University, TILEC)

  • Goergen, M.
  • Renneboog, L.D.R.

    (Tilburg University, TILEC)

Abstract

This paper investigates the market's reaction to U.K. insider transactions and analyzes whether the reaction depends on the firm's ownership. We present three major findings. First, differences in regulation between the U.K. and United States, in particular the speedier reporting of trades in the U.K., may explain the observed larger abnormal returns in the U.K. Second, ownership by directors and outside shareholders has an impact on the abnormal returns. Third, it is important to adjust for news released before directors' trades. In particular, trades preceded by news on mergers and acquisitions and CEO replacements contain significantly less information.
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Suggested Citation

  • Fidrmucova, J. & Goergen, M. & Renneboog, L.D.R., 2005. "Insider Trading, News Releases and Ownership Concentration," Discussion Paper 2005-025, Tilburg University, Tilburg Law and Economic Center.
    • Handle: RePEc:tiu:tiutil:12ebc2dc-8f53-4136-b360-62795ba257a1
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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