IDEAS home Printed from https://ideas.repec.org/a/eme/jrfpps/jrf-09-2018-0134.html
   My bibliography  Save this article

Effect of pre-disclosure information leakage by block traders

Author

Listed:
  • Tai-Young Kim

Abstract

Purpose - This paper aims to investigate pre-disclosure information leakage by block traders and market reactions to disclosures of off-hours block trading compared to off-market trading. Design/methodology/approach - Stock responses were analyzed based on timely disclosures regarding Korean firms’ decisions to dispose of their own shares to improve their financial structures. Findings - The results showed that pre-disclosure abnormal returns were generated in off-hours block trading. In contrast, on disclosure days, the returns for off-hours block trading were significantly lower than those for off-market trading. It was consistent with prior studies, indicating that block traders were related to information leakage and caused moral hazard problems. Originality/value - The comparison between off-hours block trading and off-market trading provides important insights regarding block traders’ behavior. This study’s findings on the leakage of information from block traders indicate the need for firms to exercise caution when using block traders.

Suggested Citation

  • Tai-Young Kim, 2019. "Effect of pre-disclosure information leakage by block traders," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 20(5), pages 470-483, October.
    • Handle: RePEc:eme:jrfpps:jrf-09-2018-0134
    DOI: 10.1108/JRF-09-2018-0134
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JRF-09-2018-0134/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/JRF-09-2018-0134/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/JRF-09-2018-0134?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.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jianing Zhu & Cunyi Yang, 2022. "Analysis of Stock Market Information Leakage by RDD," Economic Analysis Letters, Anser Press, vol. 1(1), pages 28-33, September.

    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:eme:jrfpps:jrf-09-2018-0134. 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: Emerald Support (email available below). General contact details of provider: .

    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.