The Open UniversitySkip to content
 

Insider Trading and Financing Constraints

Ataullah, Ali; Goergen, Marc and Le, Hang (2014). Insider Trading and Financing Constraints. Financial Review, 49(4) pp. 685–712.

Full text available as:
[img]
Preview
PDF (Accepted Manuscript) - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
Download (225kB) | Preview
DOI (Digital Object Identifier) Link: https://doi.org/10.1111/fire.12053
Google Scholar: Look up in Google Scholar

Abstract

Insider trading may alleviate financing constraints by conveying value-relevant information to the market (the information effect) or may exacerbate financing constraints by impairing market liquidity and distorting insiders’ incentives to disclose value-relevant information (the confidence effect). We examine the significance of these two contrasting effects by investigating the link between insider trading and financing constraints as measured by the investment-cash flow sensitivity. We find that, overall insider trading exacerbates financing constraints; however the information effect dominates the confidence effect for insider purchases. Only trades by executive directors are significantly related to financing constraints.

Item Type: Journal Item
ISSN: 0732-8516
Academic Unit/School: Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
Faculty of Business and Law (FBL) > Business
Faculty of Business and Law (FBL)
Related URLs:
Item ID: 50861
Depositing User: Ali Ataullah
Date Deposited: 07 Sep 2017 16:03
Last Modified: 15 Jun 2019 16:44
URI: http://oro.open.ac.uk/id/eprint/50861
Share this page:

Metrics

Altmetrics from Altmetric

Citations from Dimensions

Download history for this item

These details should be considered as only a guide to the number of downloads performed manually. Algorithmic methods have been applied in an attempt to remove automated downloads from the displayed statistics but no guarantee can be made as to the accuracy of the figures.

Actions (login may be required)

Policies | Disclaimer

© The Open University   contact the OU