IDEAS home Printed from https://ideas.repec.org/a/bla/jbfnac/v45y2018i3-4p482-508.html
   My bibliography  Save this article

Insider trading and the post†earnings announcement drift

Author

Listed:
  • Christina Dargenidou
  • Ian Tonks
  • Fanis Tsoligkas

Abstract

We show that trades by corporate insiders after an earnings announcement determine in part the extent of the post†earnings announcement drift anomaly. Contrarian trades mitigate the under†reaction to earnings announcements, and confirmatory trades allow for price discovery with price movements continuing in the same direction as the earnings surprise. These results are consistent with insider trading being a mechanism that provides relevant information on transitory or permanent changes to the earnings process, allowing the market to make appropriate inferences about the nature of the earnings surprise.

Suggested Citation

  • Christina Dargenidou & Ian Tonks & Fanis Tsoligkas, 2018. "Insider trading and the post†earnings announcement drift," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 45(3-4), pages 482-508, March.
    • Handle: RePEc:bla:jbfnac:v:45:y:2018:i:3-4:p:482-508
    DOI: 10.1111/jbfa.12305
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jbfa.12305
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jbfa.12305?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
    ---><---

    Citations

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


    Cited by:

    1. Fink, Josef, 2021. "A review of the Post-Earnings-Announcement Drift," Journal of Behavioral and Experimental Finance, Elsevier, vol. 29(C).
    2. Tsalavoutas, Ioannis & Tsoligkas, Fanis, 2021. "Uncertainty avoidance and stock price informativeness of future earnings," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 75(C).
    3. Josef Fink, 2020. "A Review of the Post-Earnings-Announcement Drift," Working Paper Series, Social and Economic Sciences 2020-04, Faculty of Social and Economic Sciences, Karl-Franzens-University Graz.
    4. Contreras, Harold, 2020. "Strategic timing of corporate insiders when trading at earnings announcements," Finance Research Letters, Elsevier, vol. 34(C).
    5. Waleed Khalid & Kashif Ur Rehman & Muhammad Kashif, 2019. "The Impact of Merger and Acquisition Firms on Stock Market Bubble," Global Regional Review, Humanity Only, vol. 4(1), pages 335-342, March.
    6. Contreras, Harold & Marcet, Francisco, 2021. "Sell-side analyst heterogeneity and insider trading," Journal of Corporate Finance, Elsevier, vol. 66(C).
    7. Zhang, Sijia & Gregoriou, Andros, 2020. "Post earnings announcement drift, liquidity and zero leverage firms: Evidence from the UK stock market," Journal of Business Research, Elsevier, vol. 116(C), pages 13-26.

    More about this item

    Statistics

    Access and download statistics

    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:bla:jbfnac:v:45:y:2018:i:3-4:p:482-508. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X .

    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.