Analysis of insider trading in Belgium
In essence, insider trading is the trading of securities by corporate insiders such as owners, managers and directors. As insiders often possess securities within their companies in exchange for their contributed capital or as part of their remuneration package, trading by insiders is common practice and happens on a day-to-day basis. Nonetheless, insider trading and more specifically the profitability of insider trading is one of the most heavily debated topics among economists, legal scholars and financial market regulators. On the one hand, insiders may just have a better understanding of t... Mehr ...
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Dokumenttyp: | dissertation |
Erscheinungsdatum: | 2013 |
Verlag/Hrsg.: |
Ghent University. Faculty of Economics and Business Administration
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Schlagwörter: | Business and Economics / Insider trading / Belgium / Event study |
Sprache: | Englisch |
Permalink: | https://search.fid-benelux.de/Record/base-28539187 |
Datenquelle: | BASE; Originalkatalog |
Powered By: | BASE |
Link(s) : | https://biblio.ugent.be/publication/4094883 |
In essence, insider trading is the trading of securities by corporate insiders such as owners, managers and directors. As insiders often possess securities within their companies in exchange for their contributed capital or as part of their remuneration package, trading by insiders is common practice and happens on a day-to-day basis. Nonetheless, insider trading and more specifically the profitability of insider trading is one of the most heavily debated topics among economists, legal scholars and financial market regulators. On the one hand, insiders may just have a better understanding of their firm’s economics which may also give them an informational benefit over other investors. Their in-depth knowledge of, for example, internal company processes, management practices and the industry in which their company operates, may help them to recognize mispricing by the market and improve the timing of their trades. However, on the other hand, insiders may also abuse their position within a company to get access to price-sensitive information, unknown to other investors. Accordingly, if insiders would trade on this superior prior knowledge, this would lead to unfair enrichment at the expense of other investors. This dissertation contributes to the understanding of insider trading and insider trading profitability by exploring a unique database on the trading activity of insiders from Belgian listed companies. The first dissertation paper studies whether the profitability of insider trading was affected by the occurrence of the recent financial crisis. Such a financial crisis creates a chaotic financial environment in which investors react more nervously to news and experience more difficulties in ascertaining the fundamental value of companies. An interesting question is whether this uncertain and turbulent investment environment enlarged the opportunities of insiders to exploit their informational benefit. Our research results show that, while Belgian insiders were generally able to earn excess returns, the ...