Insider trading and informed trading patterns
This paper aims to examine how corporate insider trading influences trading patterns of foreign and institutional investors especially in firms with high discretionary accruals and low book-to-market ratios as proxies for information uncertainty. This study uses methods such as trading patterns of i...
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| Format: | Article |
| Language: | Russian |
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Government of the Russian Federation, Financial University
2022-02-01
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| Series: | Финансы: теория и практика |
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| Online Access: | https://financetp.fa.ru/jour/article/view/1503 |
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| _version_ | 1850025911499358208 |
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| author | G. Pyo |
| author_facet | G. Pyo |
| author_sort | G. Pyo |
| collection | DOAJ |
| description | This paper aims to examine how corporate insider trading influences trading patterns of foreign and institutional investors especially in firms with high discretionary accruals and low book-to-market ratios as proxies for information uncertainty. This study uses methods such as trading patterns of informed traders who are considered to gather more precise information before and after insider trading and tests how insider trading affects informed traders. The results of this study provide evidence that insider trading is likely to influence informed traders’ trading patterns. After controlling for firm-specific factors, this study finds that the event and the amount of insider trading affect significantly foreign and institutional trading patterns. Furthermore, the relation between informed trading and insider trading is more enhanced when firms have a high level of discretionary accruals and a low book-to-market ratio. Prior studies have focused on the association between abnormal returns of insider trading and types of insider information disseminated, while informed trading patterns and insider trading with information uncertainty have not been specifically considered. This study enables practitioners to interpret corporate insider trading with information uncertainty on informed trading patterns. |
| format | Article |
| id | doaj-art-8704cc8f736c4f198713025c8e1dec49 |
| institution | DOAJ |
| issn | 2587-5671 2587-7089 |
| language | Russian |
| publishDate | 2022-02-01 |
| publisher | Government of the Russian Federation, Financial University |
| record_format | Article |
| series | Финансы: теория и практика |
| spelling | doaj-art-8704cc8f736c4f198713025c8e1dec492025-08-20T03:00:42ZrusGovernment of the Russian Federation, Financial UniversityФинансы: теория и практика2587-56712587-70892022-02-012619110210.26794/2587-5671-2022-26-1-91-102901Insider trading and informed trading patternsG. Pyo0Konyang UniversityThis paper aims to examine how corporate insider trading influences trading patterns of foreign and institutional investors especially in firms with high discretionary accruals and low book-to-market ratios as proxies for information uncertainty. This study uses methods such as trading patterns of informed traders who are considered to gather more precise information before and after insider trading and tests how insider trading affects informed traders. The results of this study provide evidence that insider trading is likely to influence informed traders’ trading patterns. After controlling for firm-specific factors, this study finds that the event and the amount of insider trading affect significantly foreign and institutional trading patterns. Furthermore, the relation between informed trading and insider trading is more enhanced when firms have a high level of discretionary accruals and a low book-to-market ratio. Prior studies have focused on the association between abnormal returns of insider trading and types of insider information disseminated, while informed trading patterns and insider trading with information uncertainty have not been specifically considered. This study enables practitioners to interpret corporate insider trading with information uncertainty on informed trading patterns.https://financetp.fa.ru/jour/article/view/1503discretionary accrualsinformed tradinginsider trading |
| spellingShingle | G. Pyo Insider trading and informed trading patterns Финансы: теория и практика discretionary accruals informed trading insider trading |
| title | Insider trading and informed trading patterns |
| title_full | Insider trading and informed trading patterns |
| title_fullStr | Insider trading and informed trading patterns |
| title_full_unstemmed | Insider trading and informed trading patterns |
| title_short | Insider trading and informed trading patterns |
| title_sort | insider trading and informed trading patterns |
| topic | discretionary accruals informed trading insider trading |
| url | https://financetp.fa.ru/jour/article/view/1503 |
| work_keys_str_mv | AT gpyo insidertradingandinformedtradingpatterns |