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Insider Trading Activities Before the Simultaneous Announcements of Earnings and Dividends

Author

Listed:
  • Louis T. W. Cheng

    (School of Accounting and Finance, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, China)

  • Ricky W. F. Szeto

    (Department of Business Administration, Hong Kong Shue Yan College, Braemar Hill, North Point, Hong Kong, China)

  • T. Y. Leung

    (Department of Accountancy, Hong Kong Shue Yan College, Braemar Hill, North Point, Hong Kong, China;
    Department of Accountancy, City University of Hong Kong, Hong Kong, China)

Abstract

We employ a sample of 3,177 events from Hong Kong industrial firms during the 1993–1999 period to examine insider trading activities around earnings and dividends announcements. By controlling for earnings management, special dividends, and other firm level financial indicators, we find that the presence of insider trading, its trading direction, and its trading intensity are related to the signals of these simultaneous earnings and dividends announcements. Various tests show that our findings are robust regardless of the proxies used for measuring insider trading activities, earnings, and dividend changes.

Suggested Citation

  • Louis T. W. Cheng & Ricky W. F. Szeto & T. Y. Leung, 2005. "Insider Trading Activities Before the Simultaneous Announcements of Earnings and Dividends," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 279-307.
    • Handle: RePEc:wsi:rpbfmp:v:08:y:2005:i:02:n:s0219091505000385
    DOI: 10.1142/S0219091505000385
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    Citations

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    Cited by:

    1. Yin-Hua Yeh & Pei-Gi Shu & Ya-Wei Yang, 2016. "How Insiders’ Personal Incentives and Timeliness of Information Revelation are Related to Their Sales Timing," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 19(02), pages 1-26, June.
    2. Jonathan A. Milian, 2016. "Insider sales based on short-term earnings information," Review of Quantitative Finance and Accounting, Springer, vol. 47(1), pages 109-128, July.

    More about this item

    Keywords

    Insider trading; earnings management; dividends;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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