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The performance of corporate legal insiders on the French stock market

Author

Listed:
  • Stanislas Nivelleau de La Brunière

    (IESEG School of Management Lille)

  • Jean-Come Haye

    (IESEG School of Management Lille)

  • Paolo Mazza

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper aims to examine the performance of legal insiders on the French market, from January 2011 to December 2017. We focus on purchase transactions in order not to face the many reasons that can force investors to close their position. Our results suggest that insiders generate an excess return over the SBF120 index on the short run. An outsider mimicking insiders' actions can generate similar profits. This implies that their informational advantage is rather short-lived. However, both of them fail to beat simulated random investors in general. Our findings highlight that the outperformance is rather stock-specific: insiders beat random investors for some stocks. We also disentangle management from non-management insiders and show that non-management insiders generate a lower average excess return than management insiders. Our simulation setup however shows that none of the groups is able to beat random investors for all the stocks, even if management insiders outperform the simulated series in more cases than non-management insiders.

Suggested Citation

  • Stanislas Nivelleau de La Brunière & Jean-Come Haye & Paolo Mazza, 2020. "The performance of corporate legal insiders on the French stock market," Post-Print hal-02998232, HAL.
    • Handle: RePEc:hal:journl:hal-02998232
    DOI: 10.1016/j.irle.2019.105880
    Note: View the original document on HAL open archive server: https://hal.science/hal-02998232
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    References listed on IDEAS

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