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http://bura.brunel.ac.uk/handle/2438/29620
Title: | Corruption and insider trading |
Authors: | Kyriacou, K Liu, S Mase, B |
Keywords: | corruption;insider trading;entertainment and travel costs (ETC);abnormal returns;stochastic frontier analysis |
Issue Date: | 24-Aug-2024 |
Publisher: | Elsevier |
Citation: | Kyriacou, K., Liu, S. and Mase, B. (2024) 'Corruption and insider trading', Journal of Corporate Finance, 2024, 0 (in press, pre-proof), 102654, pp. 1 - 50. doi: 10.1016/j.jcorpfin.2024.102654. |
Abstract: | We investigate firm corruption in China by extracting a measure of corruption from published financial statements and use this to demonstrate that corruption impacts the trading decisions of insiders. Specifically, we show that insiders in firms that are more corrupt trade more aggressively, and they are more willing to trade on their private information as evidenced by the increased informativeness of their trades, in respect of both purchases and sales. This link between firm corruption and trade informativeness is robust to the inclusion of a number of factors that are known to influence the informativeness of such trades, including trade characteristics, insider characteristics and the firm's information environment. We also consider the effect of the appointment of a new CEO or Chair. Overall, corruption related trade informativeness holds consistently for both purchases and sales. Finally, we show that this measure of corruption is robust to the inclusion of several alternative indicators of corporate misconduct. |
Description: | Data availability: Data will be made available on request. JEL classification: C23; G14; D73; M14. |
URI: | https://bura.brunel.ac.uk/handle/2438/29620 |
DOI: | https://doi.org/10.1016/j.jcorpfin.2024.102654 |
ISSN: | 0929-1199 |
Other Identifiers: | ORCiD: Kyriacos Kyriacou https://orcid.org/0000-0002-2019-9788 ORCiD: Siming Liu https://orcid.org/0000-0001-6855-8391 ORCiD: Bryan Mase https://orcid.org/0000-0002-9506-3009 102654 |
Appears in Collections: | Dept of Economics and Finance Research Papers |
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FullText.pdf | Copyright © 2024 The Authors. Published by Elsevier B.V. This is an open access article under a Creative Commons license (https://creativecommons.org/licenses/by/4.0/). | 1.96 MB | Adobe PDF | View/Open |
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