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The market response of insider transferring trades and firm characteristics in Taiwan

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  • Chang, Chiao-Yi

Abstract

This paper reports the announcement effects of insider transfer trades and relates these with firms' characteristics. Regulations in Taiwan specify that insiders give three days prior notice to the competent authority of stock transfers and this news can stimulate market participants' investment decisions. We find both the positive and negative abnormal returns exist following insider transfer trade announcements, especially for smaller firm. However, smaller firm sizes associate with larger magnitudes of negative abnormal returns. Furthermore, the connection between smaller firms and those with higher book-to-market ratios strengthens for larger negative abnormal returns.

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  • Chang, Chiao-Yi, 2013. "The market response of insider transferring trades and firm characteristics in Taiwan," Emerging Markets Review, Elsevier, vol. 16(C), pages 131-144.
    • Handle: RePEc:eee:ememar:v:16:y:2013:i:c:p:131-144
    DOI: 10.1016/j.ememar.2013.05.002
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    More about this item

    Keywords

    Insider trading; Size effect; Value effect; Emerging market;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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