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Three Essays On Insider Trading
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Book Synopsis Three Essays on Insider Trading by : Carla Evelyn Tighe
Download or read book Three Essays on Insider Trading written by Carla Evelyn Tighe and published by . This book was released on 1989 with total page 190 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation presents three theoretical essays on insider trading in financial markets. The first essay studies the workings of a cash market and a futures market under uncertainty. The model in this essay is an extension of work by Danthine (Journal of Economic Theory, 1978), in which perfectly competitive risk averse producers can sell their output on the cash market, at an uncertain price, or on a futures market at a guaranteed price. Risk averse speculators also trade in futures, having received noisy signals about eventual cash demand. In my first essay, the speculators are as uniformed as the competitive producers. A dominant firm, however, possesses information about cash demand. Each uniformed agent has individual beliefs about demand. In equilibrium, these beliefs remain heterogeneous. The inside information of the dominant firm is not necessarily revealed. The second and third essays study a financial market in which a single risky asset is traded. This work generalizes a paper by Kyle (Econometrica, 1985), in which a single insider knows the value of the risky asset perfectly. Uninformed traders (market makers) and nonrational noise traders also trade in the market. My second essay generalizes Kyle (1985) to allow for a finite number of noncolluding insiders to trade. As the number of insiders increases, insider profits--both individual and for the group as a whole--decrease, and more of the inside knowledge is incorporated into the market-clearing price. My third essay studies two noncolluding insiders. These insiders, however, do not necessarily know the precise value of the risky asset. In the first section of this essay, one insider has perfect information, while the other receives a noisy signal. In the second section, both insiders receive noisy signals. The results in these extensions of the model depend upon how informative the signals are. If the variance of each signal approaches infinity, the signal is virtually useless, and the insiders will not trade. Less noisy signals provide results comparable to the perfect information case of the second essay.
Book Synopsis Three Essays on Financial Intermediary and Insider Trading by : Xiaoqiong Wang
Download or read book Three Essays on Financial Intermediary and Insider Trading written by Xiaoqiong Wang and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three essays in finance by : Leslie Ann Jeng
Download or read book Three essays in finance written by Leslie Ann Jeng and published by . This book was released on 1998 with total page 131 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Dissecting Fortune and Woe from Insider Trading by : Mohammad Riaz Uddin
Download or read book Dissecting Fortune and Woe from Insider Trading written by Mohammad Riaz Uddin and published by . This book was released on 2019 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation examines three unanswered research questions that contribute to the understanding of informational role of corporate insiders for financial markets. In the first chapter, I examine whether celebrity or star status of a chief executive officer(CEO) affects the informativeness of his trades. In the second chapter, I test the relationship between aggregate insider trades and corporate bond rating. In the final chapter, I investigate the insider trading behavior of narcissistic CEOs. Overall, my findings support the notion that equity trades executed by corporate insiders possess useful information that could be potentially exploited by the noise traders.
Book Synopsis Insider Trading, Asymmetric Information, and Market Liquidity by : Minh Tue Vo
Download or read book Insider Trading, Asymmetric Information, and Market Liquidity written by Minh Tue Vo and published by . This book was released on 2002 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The second essay examines trading behavior, price behavior and the informational efficiency and the informativeness of the price process in the equilibrium of a strategic trading game when some investors receive information before others. We show that the early informed investor may trade against his information to maintain his information superiority over the market. Under some conditions, subsequent price changes are positively correlated. We also find that the price process is less efficient and less informative than would be the case where there is no late-informed trader." --
Book Synopsis Three Essays on Insider Trading by : Haoyang Xiong
Download or read book Three Essays on Insider Trading written by Haoyang Xiong and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the first essay we study whether and how personal off-the-job managerial indiscretions impact corporate insiders’ trading behavior. We find that executives accused of personal indiscretions earn significantly higher abnormal returns from their insider purchases and sales in a 15-day window around each trade. The results are robust to matched sample analyses. Further, insiders’ historical trading pattern or corporate culture has less explanatory power than personal attributes. We also document that exposure of these indiscretions to the public provides a disciplinary effect, as insider trading profits significantly drop following the announcement of an indiscretion, despite this drop being temporary. Corporate governance mechanisms, such as blackout policies, significantly reduce abnormal returns earned by indiscretion executives. In the second essay we find that individualistic countries regulate insider trading activities more intensely. The result is robust to controlling for alternative culture variables, additional controls, and instrumental variable analysis. We also document that individualism’s effect is magnified in democratic countries. In addition, we study the economic and financial consequences of individualism, insider trading regulation, and its enforcement. The analysis suggests that individualism and the enforcement of insider trading regulation promote financial development. Interaction effects reveal that individualism and insider trading regulation serve as complements to promote financial development. These findings contribute to the insider trading debate since regulation alone may not be the primary determinant of market efficiency. Combined, our results challenge prior works concluding that individualism is anti-regulation. In the last essay we explore the relation between insider trading regulation and the cost of equity in a country. Bhattacharya and Daouk (2002) conduct a comprehensive survey of 103 countries on whether insider trading law exists and has been enforced. They find that the enforcement of insider trading law, not the existence, can significantly reduce the cost of equity in a country. In this paper, we use an updated sample to reevaluate this topic and answer whether this relation still holds after adding 20 years of new data. Preliminary results show that countries with lighter insider trading regulation and countries that have enforced insider trading laws tend to experience lower cost of equity.
Book Synopsis Three Essays on Mergers and Acquisitions by : Chunling Xia
Download or read book Three Essays on Mergers and Acquisitions written by Chunling Xia and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays on Credit Ratings, Earnings Management, and Insider Trading by : Shuo Wang
Download or read book Three Essays on Credit Ratings, Earnings Management, and Insider Trading written by Shuo Wang and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays on Informed Trading by : Frank Sensenbrenner
Download or read book Three Essays on Informed Trading written by Frank Sensenbrenner and published by . This book was released on 2013 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays examining the behavior of informed traders in financial markets and how they affect asset pricing. It examines informed traders' role in shaping securities prices in three ways. It examines whether on a macro and micro basis insider traders move prices to a different degree than non-insiders. In addition, it uses econometric methods to determine what exchange generates permanent price trends in UK shares. Lastly, it looks at another side effect of fragmentation - how a 'best execution' mandate and related market structure changes affect transactions costs in liquid UK, French, and German shares.These studies expand on current literature in various ways - extant insider trading literature has either primarily focused on daily price movement and volume or had consisted of case studies, the conclusions of which may be idiosyncratic and therefore unrepresentative of typical insider behavior. The new phenomenon of multilateral trading facilities (also known as electronic communications networks) and the proliferation of algorithmic or computer-mediated trading had not been examined in price discovery papers, due to their relative novelty. In addition, despite a bevy of literature offering informed insight into the impact of the European Union's Markets in Financial Instruments Directive (MiFID), there has been a dearth of empirical studies assessing its impact on European securities markets. Chapters 2 and 3 examine MiFID and computerized trading from two different perspectives: that of which trades lead to permanent prices, and that of transactions costs.The conclusions drawn in this dissertation will be of interest to regulators, market operators, and traders, as they offer insight into the impact of market structure and how it impacts informed traders who participate in them.
Book Synopsis Three Essays on Investments and Corporate Finance by : Marc Antony Via
Download or read book Three Essays on Investments and Corporate Finance written by Marc Antony Via and published by . This book was released on 2014 with total page 207 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays on investments and corporate finance. The first essay is an investment article focused on factors affecting market makers in the trading of securities, the second essay is a corporate finance article which empirically tests theories of what factors motivate executives to innovate, while the third essay is a corporate finance article which empirically tests theories of why returns are higher in firms with high organization capital investments. For the first essay, I evaluate the shift in the duration of legal insider trading and asymmetric information after Sarbanes Oxley, and find that market makers can identify asymmetric trading via the PIN measure and abnormal volumes and adjust spreads accordingly. This study is the first to consider the duration and accuracy of asymmetric trading and their effects on bid ask spreads. The second essay considers executive incentives to innovate based on firm governance and compensation policies. Basically it seeks to empirically test the theoretical predictions of Manso (2011). Manso theorizes that the individual choice of management to innovate is motivated by a firm tolerance for early failure, as innovations often struggle along their development paths. Ultimately, I find empirical support for many of the predictions of Manso. The third essay addresses how the threat of talented employee departure from firms affects firm risk. Eisfeldt and Papanikoloau (2013) introduced the idea that the threat of the loss of key talent may increase risk for firms with high levels of organization capital. However, they do not provide direct evidence that this risk increase is due to this employment threat, and other literature has suggested that SG & A risk is from management inability or unwillingness to reduce costs. I add to this debate by testing the movement of inventors between firms, and find strong support for the theories of Eisfeldt and Papanikolaou (2013).
Book Synopsis Three Essays on the Effects of Executives' Informal Networks on Shareholder Value, Financial and Tax Reporting Outcomes by : Jan Philipp Klaus
Download or read book Three Essays on the Effects of Executives' Informal Networks on Shareholder Value, Financial and Tax Reporting Outcomes written by Jan Philipp Klaus and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior literature suggests that CEOs capitalize on their position within the hierarchy of all business executives, resulting in various - both positive and negative - firm outcomes. Using a novel data set on golf outings to measure the quality of a CEO's informal (vs. formal) network, as measured by the CEO's network centrality, this study examines whether well-connected CEOs generate private gains through insider trades. Results suggest that, among golfing CEOs, CEOs with higher quality informal networks generate significantly higher insider trading profits on sales of their firms' stock, consistent with more famous, powerful, and influential CEOs possessing superior information. The paper continues by delineating a channel through which private information flow to network participants by documenting significantly different golf patterns of CEOs during the two weeks before material firm events become public while showing that CEOs generate noticeably higher insider trading profits from stock trades executed during the two weeks following these golf outings. This study highlights a setting in which shareholders are at risk of wealth transfer and illustrates the potential limitations of regulation concerning insider trading.
Book Synopsis Information Content of Insider Trading in Germany by : Konstantina Kapsocavadis
Download or read book Information Content of Insider Trading in Germany written by Konstantina Kapsocavadis and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays on Corporate Insiders and Financial Analysts by : Huabing Wang
Download or read book Three Essays on Corporate Insiders and Financial Analysts written by Huabing Wang and published by . This book was released on 2007 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Three Essays in Empirical Finance by : Xiaowei Xu
Download or read book Three Essays in Empirical Finance written by Xiaowei Xu and published by . This book was released on 2014 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis contains three separate essays on headquarters relocations, insider trading informativeness and CEO education. We (1) study the headquarters relocation event and understand who benefits from the relocation decisions; (2) investigate the role of firm opacity in determining insider trading informativeness; and (3) document whether and when highly trained human capital help increase and sustain firm value. Among those seemingly unrelated topics, the common theme is the role of CEOs -the corporate decisions they make, the trading behaviours they have or the educations they obtain--in corporate valuations.
Book Synopsis Three Essays in Finance, Real Estate, and Insurance by : Evgeny Radetskiy
Download or read book Three Essays in Finance, Real Estate, and Insurance written by Evgeny Radetskiy and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: There are three essays that comprise this dissertation. In the first essay we investigate how a country's enforcement of insider trading laws affects learning among stock market participants. We measure learning as the speed with which analyst forecast errors decline as the firm matures. We show that analyst forecast errors decline faster with progression in the firm's age (more learning), when insider trading laws are enforced. We find that learning improves and M/B ratios stabilize faster with the enforcement of insider trading laws. These learning effects are more pronounced among countries with stronger regulatory infrastructure. Also, we demonstrate that firms with higher analyst forecast errors and slower rates of learning before the 2008 financial crisis have a significantly higher probability of stock crash. In the second essay, we temporally examine the existence of price premiums for a sample of single family homes in gated residential communities relative to values in comporable non-gated communities in Shelby County, Tennessee. Controling for idiosyncratic attributes, we find that homes in gated communities carry significant price premiums relative to similar homes in non-gated communities. Price premiums are highest for medium size gated communities. Premiums were also evident in higher priced gated communities before 2008 but vanished after the financial crisis. We conclude that price premiums result from net gated community benefits. The third essay develops a risk management proposal for a two-tiered private-public national health insurance plan. Under this plan, private insurers underwrite basic plans and perform most administrative functions. A second-tier, public national health reinsurance plan allows truncated annual losses for private insurers. When private insurers' annual per person claims exceed a pre-specified level, additional claims are undeerwritten by a single payer, public national health reinsurance system. We develop an actuarial approach that considers possible contemporaneous correlation between paid claim frequency and severity and first-order serial correlation. Given a first-tier loss cutoff of $15,000, we demonstrate that premiums are reduced by approximately 60% when compared to current private insurer pure premiums. We suggest that a two-tiered health care system may better provide all citizens health insurance that is more affordable for employers and individuals.
Download or read book Essays on Insider Trading written by and published by . This book was released on 2015 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Essays on Insider Trading and Securities Regulation by : C. E. F. Rickett
Download or read book Essays on Insider Trading and Securities Regulation written by C. E. F. Rickett and published by Brooker's Legal Information. This book was released on 1997-01-01 with total page 276 pages. Available in PDF, EPUB and Kindle. Book excerpt:
