IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v39y1991i4p333-53.html
   My bibliography  Save this article

Insider Trading and the Value of the Firm

Author

Listed:
  • Masson, Robert T
  • Madhavan, Ananth

Abstract

Previous studies of insider trading have examined the profitability to executives of their stock trading with a view to evaluating the informational efficiency of securities markets. The authors examine empirically whether insider trading raises or lowers firm value. To correctly identify the effects on firm value at the margin, they correct for the simultaneity of earnings, insider holdings, and the amount of insider trading. The authors explicitly deal with simultaneity by using a two-part testing procedure. Their results suggest that insider trading lowers the value of the firm at the margin, but that greater executive stock ownership raises the value. Copyright 1991 by Blackwell Publishing Ltd.

Suggested Citation

  • Masson, Robert T & Madhavan, Ananth, 1991. "Insider Trading and the Value of the Firm," Journal of Industrial Economics, Wiley Blackwell, vol. 39(4), pages 333-353, June.
  • Handle: RePEc:bla:jindec:v:39:y:1991:i:4:p:333-53
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-1821%28199106%2939%3A4%3C333%3AITATVO%3E2.0.CO%3B2-A&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Xiao, 2020. "The impact of economic policy uncertainty on insider trades: A cross-country analysis," Journal of Business Research, Elsevier, vol. 119(C), pages 41-57.
    2. Akram Khalilov & Beatriz Garcia Osma, 2020. "Accounting conservatism and the profitability of corporate insiders," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 47(3-4), pages 333-364, March.
    3. Poitras, Geoffrey, 1994. "Shareholder wealth maximization, business ethics and social responsibility," MPRA Paper 113221, University Library of Munich, Germany.
    4. Te Bao & Edward Halim & Charles N. Noussair & Yohanes E. Riyanto, 2021. "Managerial incentives and stock price dynamics: an experimental approach," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 617-648, June.
    5. Laura Beny, 2006. "Do Investors Value Insider Trading Laws? International Evidence," William Davidson Institute Working Papers Series wp837, William Davidson Institute at the University of Michigan.
    6. Brodmann, Jennifer & Unsal, Omer & Hassan, M. Kabir, 2019. "Political lobbying, insider trading, and CEO compensation," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 548-565.

    More about this item

    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:bla:jindec:v:39:y:1991:i:4:p:333-53. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    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.