What Enhances Insider Trading Profitability?
AbstractThis study analyses the factors triggering insider trading profitability. Since there is not much evidence on this topic in the continental-European context, we focus on the Spanish stock market. Our findings show that the main relevant factors (the timing ability of the insider, the transparency of the transaction and the level of free cash flow of the firm) are related to insiders’ opportunities behaviour, motivated by the lack of either managerial control within the firm or enforcement of insider trading regulation. The level of ownership concentration, the spread and the interaction between the size and the transparency of the transaction are other relevant factors, some of them tested for the first time in the insider trading literature. Copyright International Atlantic Economic Society 2007
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Bibliographic InfoArticle provided by International Atlantic Economic Society in its journal Atlantic Economic Journal.
Volume (Year): 35 (2007)
Issue (Month): 2 (June)
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insider trading profitability; nominee holdings; ownership concentration; signalling; spread; G14;
Find related papers by JEL classification:
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
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