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Government Ownership and the Public Information Content of Insider Trading: International Evidence

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  • MD Zakir Hossain
  • Man Duy (Marty) Pham
  • Sirimon Treepongkaruna
  • Jing Yu

Abstract

This paper investigates the political determinants of informed insider trading using an international sample of firms from 28 countries. We show that insider trading in state-owned firms (SOEs) is statistically and economically more profitable and informative than in non-state-owned firms, indicating a unique political information advantage enjoyed by these insiders. Further analysis shows that insider trading in government-owned firms becomes more profitable during nationwide periods of political uncertainty and when industry-specific government actions are introduced. Moreover, the aggregate insider trading in SOEs better predicts future stock market returns than that in non-SOEs. These results suggest that the political information advantage of SOE insiders is evident in both the idiosyncratic and macroeconomic information content of insider trading, consistent with the superior ability of these insiders to interpret the economic impact of the country-, industry-, and firm-specific government actions.

Suggested Citation

  • MD Zakir Hossain & Man Duy (Marty) Pham & Sirimon Treepongkaruna & Jing Yu, 2025. "Government Ownership and the Public Information Content of Insider Trading: International Evidence," European Accounting Review, Taylor & Francis Journals, vol. 34(3), pages 1087-1116, May.
    • Handle: RePEc:taf:euract:v:34:y:2025:i:3:p:1087-1116
    DOI: 10.1080/09638180.2024.2328143
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