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Does high-quality corporate communication reduce insider trading profitability?

Listed author(s):
  • Van Geyt, Debby
  • Van Cauwenberge, Philippe
  • Vander Bauwhede, Heidi
Registered author(s):

    Exploring a unique database on insider trading in Belgium, we investigate whether high-quality corporate communication contributes to reducing insider trading profitability and information asymmetry. Using disclosure scores of professional financial analysts as a proxy for communication quality, we find a significant negative association between corporate communication quality and insider trading profitability. Closer inspection of different communication channels shows that the quality of annual reports, press releases and investor relation activities is more relevant in explaining insiders’ abnormal returns than the quality of corporate websites.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0144818813000288
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    Article provided by Elsevier in its journal International Review of Law and Economics.

    Volume (Year): 37 (2014)
    Issue (Month): C ()
    Pages: 1-14

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    Handle: RePEc:eee:irlaec:v:37:y:2014:i:c:p:1-14
    DOI: 10.1016/j.irle.2013.04.002
    Contact details of provider: Web page: http://www.elsevier.com/locate/irle

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