IDEAS home Printed from https://ideas.repec.org/a/eee/intfin/v88y2023ics104244312300094x.html
   My bibliography  Save this article

The impact of foreign ownership on the media’s role in curbing insider trading around private meetings

Author

Listed:
  • Liu, Mingzhi
  • Tang, Songlian
  • Wu, Zhenyu
  • Zeng, Rong

Abstract

This paper investigates whether the media, as an external governance mechanism, constrains insider trading. In addition, we study two competing views of foreign ownership as an internal corporate governance mechanism – better monitoring and short-termism – by investigating the interaction effects of foreign ownership and the media on insider trading profitability. Using a unique database of private in-house meetings from 2012 to 2017, we find that media coverage is positively related to insider trading profitability, demonstrating the media’s failure as an external governance mechanism in curbing corporate insider trading. This positive relationship is stronger when foreign ownership is present, either in the form of foreign portfolio investment or foreign direct investment. Our finding that certain types of foreign investment worsen the media’s role in disciplining insider trading prompts the public to think more critically about the monitoring role of the media and foreign investment in private meetings.

Suggested Citation

  • Liu, Mingzhi & Tang, Songlian & Wu, Zhenyu & Zeng, Rong, 2023. "The impact of foreign ownership on the media’s role in curbing insider trading around private meetings," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:intfin:v:88:y:2023:i:c:s104244312300094x
    DOI: 10.1016/j.intfin.2023.101826
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S104244312300094X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.intfin.2023.101826?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intfin:v:88:y:2023:i:c:s104244312300094x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/intfin .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.