IDEAS home Printed from https://ideas.repec.org/a/ibn/ijefaa/v11y2019i7p13.html
   My bibliography  Save this article

The Relationship of Insider Trading Announcements, Ownership Structure and Corporate Governance: An Event Study Analysis of Athens Stock Exchange Market Technology Firms

Author

Listed:
  • Ioannis Antoniadis
  • Christos Gkasis
  • Stamatis Kontsas

Abstract

In the present paper, the relationship between corporate governance mechanisms of a firm and stock returns triggered by insider trading announcements is examined. Event study methodology has been used to evaluate the influence of 636 insider trading announcements performed by executives of 14 listed firms in the Athens Stock Exchange, that operate in the technology sector, during the period 2007-2013. The relationship between cumulative abnormal stock returns (CARs), caused by the announcements, and corporate governance characteristics, was then examined for different time windows, both for sales and purchases of stocks by insiders. Our findings suggest that insider trading, especially in purchases, performed by CEOs and members of the Boards of Directors, has a significant effect on stock returns in the long run. More specifically concentrated ownership structures and control were found to have a negative/positive effect in abnormal stock returns of the firms only in long-term periods of time following the announcement of purchases/sales.

Suggested Citation

  • Ioannis Antoniadis & Christos Gkasis & Stamatis Kontsas, 2019. "The Relationship of Insider Trading Announcements, Ownership Structure and Corporate Governance: An Event Study Analysis of Athens Stock Exchange Market Technology Firms," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(7), pages 1-13, July.
    • Handle: RePEc:ibn:ijefaa:v:11:y:2019:i:7:p:13
    as

    Download full text from publisher

    File URL: http://www.ccsenet.org/journal/index.php/ijef/article/download/0/0/39494/40367
    Download Restriction: no
    File URL: http://www.ccsenet.org/journal/index.php/ijef/article/view/0/39494
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Emanuele Bajo & Marco Bigelli & David Hillier & Barbara Petracci, 2009. "The Determinants of Regulatory Compliance: An Analysis of Insider Trading Disclosures in Italy," Journal of Business Ethics, Springer, vol. 90(3), pages 331-343, December.
    2. Maug, Ernst, 2002. "Insider trading legislation and corporate governance," European Economic Review, Elsevier, vol. 46(9), pages 1569-1597, October.
    3. Renée B. Adams & Heitor Almeida & Daniel Ferreira, 2005. "Powerful CEOs and Their Impact on Corporate Performance," The Review of Financial Studies, Society for Financial Studies, vol. 18(4), pages 1403-1432.
    4. Rafael La Porta & Florencio Lopez‐De‐Silanes & Andrei Shleifer & Robert Vishny, 2002. "Investor Protection and Corporate Valuation," Journal of Finance, American Finance Association, vol. 57(3), pages 1147-1170, June.
    5. Agrawal, Anup & Knoeber, Charles R., 1996. "Firm Performance and Mechanisms to Control Agency Problems between Managers and Shareholders," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 31(3), pages 377-397, September.
    6. André Betzer & Erik Theissen, 2009. "Insider Trading and Corporate Governance: The Case of Germany," European Financial Management, European Financial Management Association, vol. 15(2), pages 402-429, March.
    7. Bailey, Warren & Andrew Karolyi, G. & Salva, Carolina, 2006. "The economic consequences of increased disclosure: Evidence from international cross-listings," Journal of Financial Economics, Elsevier, vol. 81(1), pages 175-213, July.
    8. Peter Koudijs, 2015. "Those Who Know Most: Insider Trading in Eighteenth-Century Amsterdam," Journal of Political Economy, University of Chicago Press, vol. 123(6), pages 1356-1409.
    9. I. Antoniadis & C. Gkasis & S. Kontsas, 2017. "Corporate Governance, Insider Trading, and Stock Returns in the Greek Technology Sector," Springer Proceedings in Business and Economics, in: Nicholas Tsounis & Aspasia Vlachvei (ed.), Advances in Applied Economic Research, chapter 0, pages 679-690, Springer.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Akbar, Muhammad & Hussain, Shahzad & Ahmad, Tanveer & Hassan, Shoib, 2020. "Corporate Governance and Firm Performance in Pakistan: Dynamic Panel Estimation," CAFE Working Papers 6, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    2. Chrisostomos Florackis & Aydin Ozkan, 2009. "The Impact of Managerial Entrenchment on Agency Costs: An Empirical Investigation Using UK Panel Data," European Financial Management, European Financial Management Association, vol. 15(3), pages 497-528, June.
    3. Qing He & Oliver M. Rui, 2016. "Ownership Structure and Insider Trading: Evidence from China," Journal of Business Ethics, Springer, vol. 134(4), pages 553-574, April.
    4. Fidrmuc, Jana P. & Korczak, Adriana & Korczak, Piotr, 2013. "Why does shareholder protection matter for abnormal returns after reported insider purchases and sales?," Journal of Banking & Finance, Elsevier, vol. 37(6), pages 1915-1935.
    5. Jiraporn, Pornsit & Chatjuthamard, Pattanaporn & Tong, Shenghui & Kim, Young Sang, 2015. "Does corporate governance influence corporate risk-taking? Evidence from the Institutional Shareholders Services (ISS)," Finance Research Letters, Elsevier, vol. 13(C), pages 105-112.
    6. Seifert, Bruce & Gonenc, Halit & Wright, Jim, 2005. "The international evidence on performance and equity ownership by insiders, blockholders, and institutions," Journal of Multinational Financial Management, Elsevier, vol. 15(2), pages 171-191, April.
    7. Sheikh, Shahbaz, 2018. "CEO power, product market competition and firm value," Research in International Business and Finance, Elsevier, vol. 46(C), pages 373-386.
    8. Pier Luigi Marchini & Veronica Tibiletti & Alice Medioli & Gianluca Gabrielli, 2021. "Corporate Ownership Structure as a Determinant of “Risk Taking”: Insights from Italian Listed Companies," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(11), pages 138-138, July.
    9. Justin Law & Wayne Yu, 2018. "Corporate spinoffs and executive compensation," Frontiers of Business Research in China, Springer, vol. 12(1), pages 1-25, December.
    10. Ricardo Leal & André Carvalhal-da-Silva, 2005. "Corporate Governance and Value in Brazil (and in Chile)," Research Department Publications 3208, Inter-American Development Bank, Research Department.
    11. James, Hui Liang & Borah, Nilakshi & Lirely, Roger, 2022. "The effectiveness of board independence in high-discretion firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 103-117.
    12. Chou, Hsin-I & Hamill, Philip A. & Yeh, Yin-Hua, 2018. "Are all regulatory compliant independent director appointments the same? An analysis of Taiwanese board appointments," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 371-387.
    13. João Paulo Vieito & António Cerqueira & Elísio Brandão & Walayet A. Khan, 2009. "Executive Compensation: the Finance Perspective," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(1), pages 3-32.
    14. Hani El-Chaarani, 2014. "The Impact of Financial Structure on the Performance of European Listed Firms," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 103-124.
    15. Areneke, Geofry & Kimani, Danson, 2019. "Value relevance of multinational directorship and cross-listing on MNEs national governance disclosure practices in Sub-Saharan Africa: Evidence from Nigeria," Journal of World Business, Elsevier, vol. 54(4), pages 285-306.
    16. Hani El-Chaarani, 2015. "The Impact of Financial and Legal Structures on the Performance of European Listed Firms," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 9(2), pages 39-52.
    17. Walid Ben‐Amar & Paul André, 2006. "Separation of Ownership from Control and Acquiring Firm Performance: The Case of Family Ownership in Canada," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(3‐4), pages 517-543, April.
    18. Esther B. Brio & Ilidio Lopes-e-Silva & Javier Perote, 2016. "Effects of opportunistic behaviors on security markets: an experimental approach to insider trading and earnings management," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(3), pages 379-402, December.
    19. Ellis, Jesse & Moeller, Sara B. & Schlingemann, Frederick P. & Stulz, Rene M., 2011. "Globalization, Governance, and the Returns to Cross-Border Acquisitions," Working Paper Series 2011-1, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    20. Bardong, Florian & Bartram, Söhnke M. & Yadav, Pradeep K., 2006. "The Effect of Corporate Break-ups on Information Asymmetry: A Market Microstructure Analysis," MPRA Paper 13155, University Library of Munich, Germany, revised 26 Oct 2008.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    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:ibn:ijefaa:v:11:y:2019:i:7:p:13. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    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.