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The Information Content of Registered Insider Trading under Lax Law Enforcement

Wisniewski, Tomasz Piotr and Bohl, Martin T. (2005). The Information Content of Registered Insider Trading under Lax Law Enforcement. International Review of Law and Economics, 25(2) pp. 169–185.

DOI (Digital Object Identifier) Link: https://doi.org/10.1016/j.irle.2005.06.002
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Abstract

With the use of event study methodology, this paper examines abnormal returns following insider trading on the Warsaw Stock Exchange (WSE). The profits to informed investors appear to be substantially higher than estimates reported for mature markets. It is our contention that these profits are a manifestation of insufficient enforcement of insider trading regulations. To explore the origins of informational asymmetries we relate insider gains to firm and trade characteristics. As changes in shareholdings have to be disclosed promptly and the informational content of the insiders’ trades is not instantly discounted in stock prices, outsiders who mimic the insiders’ behavior are able to beat a benchmark portfolio.

Item Type: Journal Item
Copyright Holders: 2005 Elsevier
ISSN: 0144-8188
Keywords: Insider trading; Market efficiency; Transaction data; Polish stock market
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)
Item ID: 55398
Depositing User: Tomasz Wisniewski
Date Deposited: 12 Jun 2018 11:15
Last Modified: 10 Dec 2018 01:38
URI: http://oro.open.ac.uk/id/eprint/55398
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