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GRÉGOIRE, PHILIPPE. "INSIDER TRADING AND VOLUNTARY DISCLOSURE." International Journal of Theoretical and Applied Finance 11, no. 02 (2008): 143–62. http://dx.doi.org/10.1142/s0219024908004750.
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We set up a model to study the voluntary disclosure of information by insiders of publicly traded companies. We consider a trading framework as in [14] with many assets and one insider per asset. There is one discretionary liquidity trader who can allocate his trades across the different assets and many noise traders who trade with equal intensity in all assets. Before trade begins, insiders can disclose information in order to attract the discretionary liquidity trades. We show that if the level of noise trading is above a certain threshold, then there is an equilibrium where all insiders do not disclose any information. Below this threshold, equilibria are such that some information is always revealed by insiders. We also find that the greater the number of assets, the smaller the intensity of noise trading must be in order to induce insiders to disclose some information, and we find that insiders reveal all their information when the intensity of noise trading approaches zero.
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Huang, Han Ching, and Pei-Shan Tung. "The effects of liquidity trading on insider trade timing when an underlying option is present." Managerial Finance 44, no. 10 (2018): 1250–70. http://dx.doi.org/10.1108/mf-02-2018-0084.
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Purpose The purpose of this paper is to examine whether the underlying option impacts an insider’s propensity to purchase and sell before corporate announcements, the proportion of insiders’ trading after announcements relative to before announcements, and the insider’s profitability around corporate announcements. Design/methodology/approach The authors test whether the timing information and option have impacted on the tendency of insider trade, the percentage of all shares traded by insiders in the post-announcement to pre-announcement periods and the average cumulative abnormal stock returns during the pre-announcement period. Findings Insiders’ propensity to trade before announcements is higher for stocks without options listed than for stocks with traded options. This result is stronger for unscheduled announcements than for scheduled ones. The proportion of insiders’ trade volume after announcements relative to before announcements in stocks that have not options listed is higher than those in stocks with traded options. The positive relationship between the insiders’ signed volume and the informational content of corporate announcements is stronger in stocks without traded options than in stocks with options listed. Insider trades prior to unscheduled announcement are more profitable than those before scheduled ones. Research limitations/implications The paper examines whether there is a difference between the effects of optioned stock and non-optioned stock. Roll et al. (2010) use the relative trading volume of options to stock ratio (O/S) to proxy for informed options trading activity. Future research could explore the impact of O/S. Moreover, the authors examine how insiders with private information use such information to trade in their own firms. Mehta et al. (2017) argue that insiders also use private information to facilitate trading (shadow trading) in linked firms, such as supply chain partners or competitors. Therefore, future research could consider the impact of shadow trading. Social implications Since the insider’s propensity to buy before announcements in stocks without options listed is larger than in stocks with traded options and the relationship is stronger for unscheduled announcements than for scheduled ones, the efforts of regulators should focus on monitoring insider trading in stocks without options listed prior to unscheduled announcements. Originality/value First, Lei and Wang (2014) find that the increasing pattern of insider’s propensity to trade before unscheduled announcements is larger than that before scheduled announcements. The authors document the underlying option has impacted the insider’s propensity to purchase and sell, and the relationship is stronger for unscheduled announcements than for scheduled ones. Second, related studies show insider’s trading activity has shifted from periods before corporate announcements to periods after corporate announcements to decrease litigation risk. This paper find the underlying option has influenced the proportion of insiders’ trading after announcements relative to before announcements when the illegal insider trade-related penalties increase.
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Firth, Michael, T. Y. Leung, and Oliver M. Rui. "Insider Trading in Hong Kong: Tests of Stock Returns and Trading Frequency." Review of Pacific Basin Financial Markets and Policies 14, no. 03 (2011): 505–33. http://dx.doi.org/10.1142/s0219091511002317.
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The main purpose of this paper is to examine the legal insider trading activities by directors of companies listed on the Hong Kong Exchange over the period 1993 to 1999. One characteristic of insider trading in Hong Kong is the high frequency of transactions and the large amounts of money involved. Inside purchases appear to signal and correct undervaluation and inside sales appear to signal and correct overvaluation. In contrast to research from Britain and the United States, insider sales are more informative than purchases. On average, insiders earn HK$91,297 per trade, while outsiders who mimic insiders' transactions earn minimal returns. Many firms suffer from infrequent trading and our results are consistent with directors engaging in inside transactions so as to help create a market for the shares. In additional tests, we find that the frequency of insider trading is a function of information asymmetry.
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Stotz, Olaf. "Germany’s New Insider Law: The Empirical Evidence after the First Year." German Economic Review 7, no. 4 (2006): 449–62. http://dx.doi.org/10.1111/j.1468-0475.2006.00129.x.
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Abstract This paper investigates insider trading activities in German stocks during the first year following implementation of the new Insider Law on 1 July 2002. It can be observed that insiders act as contrarian investors. They buy stocks after prices have fallen and sell stocks after prices have risen. In general, insider trades are very profitable. A typical stock purchased by an insider yields an abnormal return of almost 3 per cent during the 25 days following the transaction. In contrast, a typical stock that has been sold by insiders achieves an abnormal return of nearly -3 per cent over the same time period. Outsiders who copy the transactions of insiders can achieve nearly the same abnormal returns. Abnormal returns remain substantial even after transaction costs. The results suggest that prices of stocks in which insiders trade do not seem to be semi-strong efficient.
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Lei, Qin, Murli Rajan, and Xuewu Wang. "Can traders beat the market? Evidence from insider trades." China Finance Review International 4, no. 3 (2014): 243–70. http://dx.doi.org/10.1108/cfri-02-2014-0006.
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Purpose – The purpose of this paper is to investigate how insiders’ trades are executed and whether and how outside investors can mimic outperforming insiders and reap substantial portfolio returns that withstand the erosion from adjustments for both the standard factors and stock characteristics in the asset pricing literature. Design/methodology/approach – The authors design a metric for measuring insiders’ trade execution quality: the trading alpha. The authors run regression analysis to control for trade difficulty, insider reputations and the corporate role ranks of insiders and document the existence of the abnormal trading alpha. The authors further form portfolios based on the abnormal trading alpha and document a significant abnormal return that is robust to both standard asset pricing factors model and the stock characteristics adjustments. Findings – Outperforming insiders at the aggregate level resemble value investors who trade on long-term fundamental information, trade patiently and earn rents from providing liquidity. Outside investors can mimic the outperforming insiders and reap significant abnormal portfolio returns. Research limitations/implications – Data limitations on insider trades and their association/interaction with their brokers prevent us from having a conclusive investigation of the trading skill hypothesis. The authors hope to further research along the lines of the trading skill hypothesis as compared to investment style hypothesis with more detailed data about the brokers used by insiders. Practical implications – The findings can be applied for money management profession in that outsider investors can monitor the trading execution and construct portfolios based on the adjusted abnormal trading alpha. The resulting portfolio has been documented to be highly profitable after risk adjustments using standard asset pricing factors as well as stock characteristics. Social implications – Professional money managers and outsider investors should be able to benefit from the findings in this paper and use the proposed trading alpha metric to construct and rebalance real-time investment portfolios. Originality/value – Outperforming insiders at the aggregate level resemble value investors who act on long-term fundamental information, trade patiently and earn rents from providing liquidity. From the perspective of investment implications, outside investors can mimic the outperforming insiders and reap substantial portfolio returns that withstand the erosion from adjustments for both the standard factors and stock characteristics in the asset pricing literature.
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Ryan, Stephen G., Jennifer Wu Tucker, and Ying Zhou. "Securitization and Insider Trading." Accounting Review 91, no. 2 (2015): 649–75. http://dx.doi.org/10.2308/accr-51230.
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ABSTRACT Securitizations are complex and opaque transactions. We hypothesize that bank insiders trade on private information about banks': (1) securitization-related recourse risks, (2) not-yet-reported current-quarter securitization income, and (3) securitization-based business model sustainability. We provide evidence that proxies for each of these types of insider information are positively associated with insider trading. Specifically, we find that net insider sales in the 2001Q2–2007Q2 pre-financial crisis quarters predict not-yet-reported non-performing securitized loans and securitization income for those quarters, and that net insider sales during 2006Q4 predict write-downs of securitization-related assets during the 2007Q3–2008Q4 crisis period. We find that net insider sales are more negatively associated with banks' subsequent stock returns in their securitization quarters than in other quarters. In supplemental analysis, we show that the above findings are driven by trades by banks' CEOs and CFOs, and that insiders avoid larger stock price losses through 10b5-1 plan sales than through non-plan sales. Data Availability: All data are available from public sources.
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Baryeh, Loretta, Peter DaDalt, and Varda Yaari. "Insider trading by directors and seniors officers before seasoned equity offerings." Corporate Ownership and Control 7, no. 2 (2009): 358–66. http://dx.doi.org/10.22495/cocv7i2c3p3.
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An important aspect of corporate governance is how directors discharge their duty to shareholders as monitors of management’s opportunistic behavior. The insider trading by officers and directors before seasoned equity offerings (SEO) provide an opportunity to examine this issue, because insiders’ sales of the firm’s stock are incongruent with the objective of the firm to maximize the proceeds of the SEO. Since the market is aware that firms attempt to inflate their proceeds by managing earnings upwards, these trades may signal that the stock is overvalued. In this study, we compare the earnings management activity and the corresponding market response to earnings management and sales by senior officers and directors. We study a sample of 233 firms that conducted SEOs in the 1987-2004 period and either their directors and/or their senior officers traded in the firm’s shares. We find that 15% have insider trading by directors only, and 85% by both directors and senior officers. The market discounts the insider trading at the issuance date (the discount increases in the volume of insiders sales), but it treats insider trading by directors as a favorable signal that reduces the discount. Our study then identifies two ways directors monitor opportunistic insider trading before SEO. One is to ban it, as evident by the fact that under our selection criteria, 791 firms conducted SEOs in the 1987-2004 period. The other is to trade too as a positive signal to the market.
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Iqbal, Mohammed, and Shijin Santhakumar. "Information asymmetry and insider trade profitability in India." Journal of Indian Business Research 10, no. 1 (2018): 53–69. http://dx.doi.org/10.1108/jibr-05-2017-0059.
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Purpose This study aims to measure the magnitude of information asymmetry between insiders and outsiders in Indian equity market. The study also investigates the effect of major information sources that affect information asymmetry namely, the informativeness of financial statements, news reports about the company and analyst follow-up. Design/methodology/approach Six-month profitability of insider trade was used as the proxy to measure information asymmetry. Fama-MacBeth two-stage regression was used to analyse the effect of information sources upon information asymmetry. Findings The results of the analysis demonstrate that in comparison with findings of similar studies the level of information asymmetry is comparatively high in India. On an average, profitable insider traders in India earn 19.28 per cent return than outside investors. Purchase transactions are more profitable than sales transactions, while the size of company and information asymmetry is associated inversely. Further, news and analyst follow-up are inversely associated with information asymmetry whereas informativeness of financial statements has little effect on information asymmetry. Practical implications The study have important insights for corporates in insider information management and legal compliance of insiders’ market activities. Results pointing to the requirements of a deeper Regulatory monitoring and stringent legal framework. Social implications The result validates the concerns of investor protection against informed trade. Originality/value The measurement of information asymmetry using profitability of insider trade is novel in Indian context even though the methodology is often used in the literature.
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Stephenson, Kevin. "Insider trading during bankruptcy: Do insiders trade on private knowledge?" International Advances in Economic Research 2, no. 2 (1996): 196. http://dx.doi.org/10.1007/bf02295064.
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Caputo, D., M. Maloof, and G. Stephens. "Detecting Insider Theft of Trade Secrets." IEEE Security & Privacy Magazine 7, no. 6 (2009): 14–21. http://dx.doi.org/10.1109/msp.2009.110.
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Reed, Sada, and Guy Harrison. "“Insider Dope” and NBA Trade Coverage: A Case Study on Unnamed Sourcing in Sport Journalism." International Journal of Sport Communication 12, no. 3 (2019): 419–30. http://dx.doi.org/10.1123/ijsc.2019-0012.
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Past research has examined the use of anonymous sources in news content and its impact on perceived credibility. Studies applying these theories in the context of sport media consumption, however, are scant and outdated. This matters because sport media is consumed for different reasons from news and has a historically symbiotic relationship with the people and events it covers. The current case study explores sources in National Basketball Association (NBA) trade stories in both national news and sport-specific publications. The study found that about 82% of trade speculation was not credited to a source. Unnamed and named sources’ trade predictions were cross-referenced with the NBA transaction log to determine if the trades actually manifested before the trade deadline. Neither sources predicted trades well: Of the 95 unsourced, speculated trades, 14 actually took place. Of the 20 sourced speculations, four took place. There was no statistically significant difference between how well named and unnamed sources predicted trades.
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Hnyluch Sobański, Konrad. "Inside information and insider trading." Studenckie Prace Prawnicze, Administratywistyczne i Ekonomiczne 29 (September 30, 2019): 119–34. http://dx.doi.org/10.19195/1733-5779.29.8.
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EU law acts often have a built-in element of the so-called self-control, consisting in verification of the effectiveness of regulation after a specified period of time from the entry into force of a legal act. In the year 2019, the Market Abuse Regulation MAR, which in 2016 introduced new regulations concerning confidential information and trade related to internal information, causing a revolution in the capital market, will be reviewed. Numerous new duties were imposed on market participants, among others in the field of transaction reporting, access to confidential information, the circle of persons having access to confidential information. Due to the above, the article discusses the regulations of confidential information and related obligations imposed on market participants, based on the current achievements of the doctrine and judicatory. These considerations have been confronted with the undesirable element of having confidential information, i.e. insider trading. Often, an entity that has access to specific confidential information uses it in an unlawful manner to achieve its own profit. This causes inequalities in access to market information and leads to distortions in the transparency of financial markets. The article also included a polemic on the morality of insider dealing. Informacja poufna w obrocie papierami wartościowymiAkty prawa unijnego często mają wbudowany element tak zwanej samokontroli self controlling, polegający na weryfikacji skuteczności regulacji po upływie określonego czasu od wejścia w życie aktu prawnego. Na rok 2019 przypada rewizja rozporządzenia MAR Market Abuse Regulation, które wprowadzając w 2016 roku nowe regulacje dotyczące informacji poufnej i obrotu związanego z informacją wewnętrzną, spowodowało rewolucję na rynku kapitałowym. Na uczestników rynku zostały nałożone nowe liczne obowiązki, między innymi w zakresie raportowania transakcji, dostępu do informacji poufnej czy też kręgu osób mających dostęp do informacji poufnej. Z uwagi na to w artykule omówione zostały regulacje informacji poufnej oraz związanych z nią obowiązków nałożonych na uczestników rynku, opierając się na aktualnym dorobku doktryny i dostępnym orzecznictwie. Rozważania zostały zestawione z niepożądanym elementem posiadania informacji poufnej, to jest insider trading. Często podmiot mający dostęp do określonych informacji poufnych wykorzystuje je w sposób bezprawny dla osiągnięcia własnego zysku. Powoduje to nierówności w dostępie do informacji rynkowych i prowadzi do zaburzenia transparentności rynków finansowych. W artykule podjęto również polemikę co do moralności wykorzystywania informacji poufnych.
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Frino, Alex, Stephen Satchell, Brad Wong, and Hui Zheng. "How much does an Illegal Insider Trade?" International Review of Finance 13, no. 2 (2013): 241–63. http://dx.doi.org/10.1111/irfi.12006.
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Ryba, Thomas. "Phenomenology as Insider Trading: Some Stipulations for the Religious "Skin Trade"." Method & Theory in the Study of Religion 19, no. 3-4 (2007): 255–80. http://dx.doi.org/10.1163/157006807x245221.
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AbstractThis paper examines some of the interpretations of the insider/outsider distinction as it is understood in the study of religion but in light of Jerry Fodor and Ernest Lepore's arguments about semantic holism and atomism. It argues that this application shows that if the outsider/insider distinction is approached as a form of global holism coupled with linguistic determinism, then it is a pseudo-problem and no further energy ought to be wasted on it. Also argued is that radically exclusive insidership or radically inclusive insidership are indefensible positions. Instead, this paper proposes that access to the inside of a worldview is, in principle, no different for a insider than for an outsider; it is a matter of degree and not kind. No variety of religious information is, per se, incommunicable, except that of the individual subject's existential subjecthood. Insidership and outsidership in the academic study of religion indicate positions with respect to agency, thematization, and explanation and should not be defined, primarily, by occupation, material, or methods.
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Sidgman, Juergen. "Form 4 Electronic Submissions and the Thomson Reuters Insider Filing Data Feed: Discrepancies and Their Impact on Research." Journal of Information Systems 29, no. 3 (2014): 1–33. http://dx.doi.org/10.2308/isys-50981.
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ABSTRACT This paper examines discrepancies between the electronic Form 4 and Thomson Reuters' Insider Filing Data Feed. The analysis shows differences in a small number of trades. The transaction code is the item frequently found to differ. Results also show that Thomson Reuters fails to follow its data codification policies. Users of Form 4 should expect discrepancies in trade and firm characteristics. Inferences about the market reaction to insider filings and trades, the association between aggregate insider trading and market returns, and cross-sectional variation in profitability of insider transactions do not appear to be significantly affected by these discrepancies. Overall, the evidence suggests that discrepancies between the electronic Form 4 and Thomson Reuters' Insider Filing Data Feed do not materially impact research. The results are consistent with observations made by the SEC suggesting that electronic filings facilitate research and data analysis and that the need for information intermediaries could be eliminated. Data Availability: Data are available from public sources identified in the paper.
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Linnertová, Dagmar, and Oleg Deev. "Insider Trading Activities and Returns of German Blue Chips." Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis 63, no. 6 (2015): 1995–2003. http://dx.doi.org/10.11118/actaun201563061995.
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The aim of this paper is to investigate the causality between stock returns and insider open market transactions. The Dumitrescu-Hurlin (2012) heterogeneous approach to panel Granger causality is chosen to examine the relationship. The investigation is conducted on the 30 most traded German blue chips during the period of 2006–2014. The strong causality is revealed in the one-month period. Thus, stock returns may be used to predict future insider trading activity. The strong causality between stock returns and future insider buying and selling transactions is further confirmed with three out of four employed insider trading indices. The fact of the legal insider trade (either buy or sell) is more important than its volume. The reverse relationship is weak and valid only for longer time horizon of twelve months. Our results indicate that insider traders do not degrade the market efficiency in the long run.
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Chang, Saeyoung, and David Mayers. "Who Benefits in an Insider Negotiated Block Trade?" Financial Management 41, no. 3 (2012): 703–31. http://dx.doi.org/10.1111/j.1755-053x.2011.01188.x.
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He, Guanming, and David Marginson. "The impact of insider trading on analyst coverage and forecasts." Accounting Research Journal 33, no. 3 (2020): 499–521. http://dx.doi.org/10.1108/arj-08-2019-0148.
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Purpose The purpose of this study is to examine the effect of insider trading on analyst coverage and the properties of analyst earnings forecasts. Given the central role of analysts for information diffusion in stock markets, advancing understanding of the role insider trades may play in analyst coverage and forecasts, especially in the context of a changing legal environment (e.g. the implementation of Regulation Fair Disclosure [Reg FD]), should be a worthy goal. Design/methodology/approach To address the research questions, the authors run regressions in which the authors identify and control for as many possible determinants of analyst coverage and forecasts (e.g. firm size, information asymmetry and earnings performance) that are correlated with insider trades. To alleviate endogeneity concerns, the authors use three approaches. First, the authors extend the sample period to the post-Reg-FD period in which managers are not allowed to provide private information to financial analysts. Second, the authors measure analyst coverage in a window that is lagged by insider trades. Third, the authors employ firm-fixed-effects regressions in all the multivariate tests. Finally, following Larcker and Rusticus (2010), the authors conduct the impact threshold for a confounding variable test to assure that all regression analyses are indeed immune to the potential correlated-omitted-variable bias. Findings The authors find that the level of analyst coverage is positively related to the intensity of insider trades and that analyst coverage is more strongly associated with insider purchases than with insider sales. The authors also find that the positive association between analyst coverage and insider trades is less pronounced after the passage of Reg FD. Further investigations reveal that analysts revise their earnings forecasts upward following insider purchases, the informativeness of analyst forecast revisions significantly increases following insider purchases and optimistic bias in analyst forecast revisions is reduced as a result of insider purchases; the authors do not find similar evidence for insider sales. Research limitations/implications A large body of insider trading literature (Johnson et al., 2009; Badertscher et al., 2011; Thevenot 2012; Skaife et al., 2013; Billings and Cedergren 2015; Dechow et al., 2016) provides evidence that insiders actively trade on their private information, such as their foreknowledge of price-relevant corporate events. This literature suggests that insider trades are potentially value-relevant and are informative about a firm’s future prospects. However, less research attention has been paid to investigating how insider trades might affect market participants’ (especially sophisticated participants’) behavior. This study contributes to understanding the role that insider trading may play in shaping analyst behavior. Practical implications Prior research (Frankel and Li, 2004; Lustgarten and Mande, 1995; Carpenter and Remmers, 2001; Seyhun, 1990) maintains that insider sales are less informative about a firm’s future prospects than are insider purchases because insider sales might take place for the liquidity and diversification purposes. By probing the stock price responses to insider selling activities, Lakonishok and Lee (2001), Jeng et al. (2003) and Fidrmuc et al. (2006) infer that insider selling is not informative about future firm performance. However, for such an inference, the authors cannot rule out the possibility that insider sales do convey value-relevant information, but the stock market does not react correctly to such trading information (Beneish and Vargus, 2002). Because the authors focus on examining analysts’ responses to insider sales, and analysts are supposed to be sophisticated in information processing, this study adds more compelling evidence for the notion that insider sales convey less information about a firm’s future prospects than do insider purchases. Social implications There is an ongoing debate about the benefits and drawbacks of insider trading. Opponents of insider trading view insider trades as inequitable and immoral and assert that restricting insider trades curbs resource misallocation and benefits the whole society. Proponents contend that insider trading accelerates the price discovery process, increases market efficiency (Leland, 1992; Bernhardt et al., 1995; Choi et al., 2016) and may even play a role in rewarding and motivating executives (Roulstone, 2003; Denis and Xu, 2013). The authors add to this debate by documenting that insider trading increases the amount of information valuable to analyst research activities and helps enhance analyst services. Originality/value To the best of the authors’ knowledge, this study is the first to offer firm-level evidence of a positive association between insider trades and analyst coverage. By accounting for the post-Reg-FD regime, this paper is also the first to provide evidence on how analysts, in the absence of access to management’s private information because of the regime change by Reg FD, react to insider trades.
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Beneish, Messod D., and Mark E. Vargus. "Insider Trading, Earnings Quality, and Accrual Mispricing." Accounting Review 77, no. 4 (2002): 755–91. http://dx.doi.org/10.2308/accr.2002.77.4.755.
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This paper investigates whether insider trading is informative about earnings quality and the valuation implications of accruals. We show that (1) the one-year-ahead persistence of income-increasing accruals is significantly lower when accompanied by abnormal insider selling and greater when accompanied by abnormal insider buying; (2) the accrual mispricing phenomenon observed in previous work (e.g., Sloan 1996) is due to the mispricing of income-increasing accruals; (3) one-year-ahead hedge returns to trading strategies based on the direction of accruals and insider trading significantly exceed those based on accruals alone; and (4) the lower persistence of income-increasing accruals accompanied by abnormal insider selling appears to be at least partly attributable to opportunistic earnings management. Our evidence suggests that market participants and researchers can use managers' contemporaneous trading in ex ante assessing the likelihood that the firms' accruals are of high or low quality, and in assessing the likelihood of earnings management. Our evidence suggesting that insiders trade on their knowledge of factors associated with accrual persistence is also relevant to policymakers charged with regulating insider trading.
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Piotroski, Joseph D., and Darren T. Roulstone. "The Influence of Analysts, Institutional Investors, and Insiders on the Incorporation of Market, Industry, and Firm-Specific Information into Stock Prices." Accounting Review 79, no. 4 (2004): 1119–51. http://dx.doi.org/10.2308/accr.2004.79.4.1119.
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We investigate the extent to which the trading and trade-generating activities of three informed market participants—financial analysts, institutional investors, and insiders—influence the relative amount of firm-specific, industry-level, and market-level information impounded into stock prices, as measured by stock return synchronicity. We find that stock return synchronicity is positively associated with analyst forecasting activities, consistent with analysts increasing the amount of industry-level information in prices through intra-industry information transfers. In contrast, stock return synchronicity is inversely related to insider trades, consistent with these transactions conveying firm-specific information. Supplemental tests show that insider and institutional trading accelerate the incorporation of the firm-specific component of future earnings news into prices alone, while analyst forecasting activity accelerates both the industry and firm-specific component of future earnings news. Our results suggest that all three parties influence the firm's information environment, but the type of price-relevant information conveyed by their activities depends on each party's relative information advantage.
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Neill, Bradley J., Mehdi Sadeghi, and Edward Watts. "Are insider trades profitable? Evidence from directors’ trade on the Australian stock exchange." Corporate Ownership and Control 5, no. 3 (2008): 176–87. http://dx.doi.org/10.22495/cocv5i3c1p2.
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This paper argues that directors earning statistically significantly abnormal returns from trades within their own companies. Evidence is provided through the analysis of 8,053 transactions by directors on the Australian Stock Exchange during the period of January 2002 to April 2006. Specifically this paper finds directors’ sales to be more profitable than purchases, contrary to much of the existing US and UK research. Director sales exhibit a price reversal effect, in that positive abnormal returns are earned prior to the sale and negative returns after it. There is also evidence to support abnormal returns being associated with buy trades, however these returns are generally earned in the periods well after the transaction has taken place. Furthermore, the profits arising from director trades appear to be negatively related to transaction value and firm size; that is, those trades which are small in terms of dollar value, and are within small cap companies, generally generate larger abnormal returns.
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Inci, A. Can, M. P. Narayanan, and H. Nejat Seyhun. "Gender Differences in Executives’ Access to Information." Journal of Financial and Quantitative Analysis 52, no. 3 (2017): 991–1016. http://dx.doi.org/10.1017/s0022109017000266.
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We provide novel evidence on gender differences in insider-trading behavior and the profitability of senior corporate executives. On average, both female and male executives make positive profits from insider trading. Males, however, earn significantly more than females in equivalent positions and also trade more than females. These gender differences disappear when we limit the sample to firms in which female trading is relatively high. Collectively, these results suggest that female executives have a disadvantage relative to males in access to inside information, even if they have equal formal status, and informal networks may play an important role in attenuating this disadvantage.
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Dissanaike, Gishan, and Kim-Hwa Lim. "Detecting and Quantifying Insider Trading and Stock Manipulation in Asian Markets." Asian Economic Papers 14, no. 3 (2015): 1–20. http://dx.doi.org/10.1162/asep_a_00368.
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This paper focuses on insider trading, where the perpetrators exploit market sensitive information to earn profits or avoid losses. The paper's objectives are as follows. First, we seek to examine whether we can detect possible insider trading and stock manipulation and react in almost real time, even though insider trading activity is intended to be evasive. Second, we also estimate the extent of illicit profits (or loss avoidance) that might have been earned. Finally, we analyze, if detection is possible, the appropriate response for regulators and other market participants. We do not restrict our study to cases where corporate events have materialized, as we hope to capture insider trading surrounding market rumors and failed corporate events. Because insider trading is executed with the aim of being evasive and undetected, it is impossible to conclude with certainty. Nevertheless, using a hypothesized model based on how insiders and stock manipulators trade, we detect price patterns that are consistent with their objective to maximize profits and at the same time be evasive.
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Bonaimé, Alice A., and Michael D. Ryngaert. "Insider trading and share repurchases: Do insiders and firms trade in the same direction?" Journal of Corporate Finance 22 (September 2013): 35–53. http://dx.doi.org/10.1016/j.jcorpfin.2013.03.003.
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Lee, Taehoon, and Sang-gyung Jun. "After-Hours Block Trading, Short Sales, And Information Leakage: Evidence From Korea." Journal of Applied Business Research (JABR) 33, no. 2 (2017): 263–82. http://dx.doi.org/10.19030/jabr.v33i2.9900.
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We investigate the impact of insider trading in after-hours block market on stock price and short sales volume, before and after the trading becomes public information. During pre-announcement period, positive (negative) abnormal stock return is generated when insiders buy (sell) their shares but does not when quasi-insiders trade, implying that stock price reflects long-lived private information of corporate governance structure. The impact is most prominent when ownership shares are transferred to (from) corporate insiders. In contrast, short sales volume generally does not depend on the identity of block holders. Short sales volume has a negative correlation with abnormal stock return only during the transaction date, indicating that a short-sale decision of tippees is based on their sole expectation on instantaneous stock returns. We also find evidence that insiders select the timing of their trades with respect to maximizing their realized profits or minimizing their purchasing costs.
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Gao, George, Qingzhong Ma, and David Ng. "The informativeness of short sellers: an insider’s perspective." China Finance Review International 8, no. 4 (2018): 354–86. http://dx.doi.org/10.1108/cfri-08-2017-0193.
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Purpose The purpose of this paper is to empirically examine whether corporate insiders extract information from activity of outsiders, specifically the short sellers. Design/methodology/approach Using portfolio approach and Fama-MacBeth regressions, this study examines the relation between short interest and subsequent insider trading activities. Findings The following results are reported. First, there is a strong inverse relation between short selling and subsequent insider trading, which is partially due to common private information and same target firm characteristics. Second, insiders extract information from shorts. This information extraction effect is more pronounced for firms whose insiders have stronger incentives to extract shorts information (insider purchases, higher short sale constraints, and better information environments). Third, during the September 2008 shorting ban, the information extraction affect disappeared among the large banned firms, whose shorting activities were distorted. Research limitations/implications The findings contradict the of-cited accusations corporate executives hold against short sellers. Instead, corporate insiders appear to trade in the same direction as suggested by shorting activities. Practical implications Among the vocal critics of short sellers are corporate insiders, who allege that short sellers beat down their stock prices. Many corporations even engage in stock repurchases to show confidence that the stock will perform well going forward despite the short sellers’ actions. This paper’s analysis on their personal portfolios suggests the other way around. Originality/value By focusing on how corporate insider trading is related to shorts information, this paper sheds new light on whether corporate decisions convey the true information the corporate insiders possess.
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Huang, Robin Hui. "Enforcement of Chinese Insider Trading Law: An Empirical and Comparative Perspective." American Journal of Comparative Law 68, no. 3 (2020): 517–75. http://dx.doi.org/10.1093/ajcl/avaa018.
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Abstract This Article conducts the first comprehensive and systematic empirical analysis of all relevant insider trading cases in China from the birth of Chinese securities markets in the early 1990s until mid-2017, shedding light on the way in which China’s insider trading law has been enforced by the regulator and criminal courts in practice. First, the Article generates descriptive statistics on features of insider trading cases, such as the total number of cases over the study period, the temporal distribution of the cases, the identity of the insider, and the nature of the insider information. Second, it measures the intensity of insider trading enforcement and compares the Chinese situation with six overseas jurisdictions, including the United States, the United Kingdom, Australia, Canada, Singapore, and Hong Kong. Third, using multiple regression analyses, it identifies potential factors determining the administrative and criminal penalties for insider trading. The results of the empirical study indicate that China has significantly stepped up its efforts to crack down on insider trading in recent years, resulting in a sharp increase in insider trading cases, particularly criminal cases since 2008. While the Chinese insider trading law was essentially transplanted from overseas jurisdictions, its; enforcement has exhibited distinctive features in its local environment. Judging by the type, magnitude, and frequency of the sanctions imposed, the intensity of insider trading enforcement in China seems to be at a level comparable to relevant jurisdictions overseas. Administrative and criminal penalties against insider trading are found to be significantly influenced by some factors, notably the amount of illegal proceeds, the magnitude of social impact, the presence of mitigating circumstances, and whether the trader used others’ accounts to trade. The hope is that the empirical findings will help inform the policy debate over the regulation of insider trading in China and beyond.
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Purnanandam, Amiyatosh, and H. Nejat Seyhun. "Do Short Sellers Trade on Private Information or False Information?" Journal of Financial and Quantitative Analysis 53, no. 3 (2018): 997–1023. http://dx.doi.org/10.1017/s0022109017001223.
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We investigate whether short sellers contribute toward the informational efficiency of market prices by trading on their private information or destabilize market prices by trading on rumors and false information. We find that short-selling activities are considerably informative about future stock returns when there is a higher likelihood of private information in stocks, as measured by insider-trading activities. Short sellers also bring considerable additional information to the market that is not fully captured by contemporaneous insider trading. Overall, these results suggest that on average, short sellers bring informational efficiency to market prices rather than destabilize them.
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Zimper, Alexander. "On the impossibility of insider trade in rational expectations equilibria." North American Journal of Economics and Finance 28 (April 2014): 109–18. http://dx.doi.org/10.1016/j.najef.2014.02.004.
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Ryba, Thomas. "Phenomenology as Insider Trading:Some Stipulations for the Religious “Skin Trade”." Method & Theory in the Study of Religion 19, no. 3-4 (2007): 255–80. http://dx.doi.org/10.1163/157006807794757467.
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Spaic, Aneta, Claire Angelique Nolasco, Lily Chi-Fang Tsai, and Michael S. Vaughn. "Does insider trading pay?" Journal of Financial Crime 26, no. 2 (2019): 647–64. http://dx.doi.org/10.1108/jfc-07-2018-0068.
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Purpose This paper analyzes trading and tipping activities in insider trading litigation decided by federal courts from January 1, 2012 to December 31, 2014. Design/methodology/approach Legal documents from the US Securities and Exchange Commission, LexisNexis and Westlaw databases were coded to determine profile, patterns of trading and settlement outcomes. Findings Results of statistical analysis indicate that a defendant in both civil and criminal cases is more likely to trade on the information when he/she receives a direct, financial benefit from breaching his/her duty of confidentiality. The defendant tipper is also more likely to pass on the information to a close personal friend, business associate or family member. The average amount of profit of defendants in both civil and criminal proceedings substantially exceeds the average amount of their settlements. Originality/value This paper offers support for the rational choice model – insider trading is often based on rational calculations of benefits not only to the defendant but also to his/her family and associates. Although the threat of civil enforcement and criminal proceedings may possibly deter him/her from committing the crime, results indicate that the amounts of settlement in both proceedings are considerably lower than the amount of profits obtained from the offense.
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Wang, Jin-Ying. "Institutional investment in repurchase stocks: insider trading information." Managerial Finance 46, no. 10 (2020): 1305–19. http://dx.doi.org/10.1108/mf-10-2019-0531.
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PurposeThis study explores whether institutional investors can distinguish an undervalued share repurchase from a falsely signaled share repurchase. This study also aims to determine what information institutions use when investing in repurchase stocks.Design/methodology/approachThis study uses unique Taiwanese data and concentrates on foreign institutions because they are the most sophisticated investors in Taiwan.FindingsThe results show that foreign institutional trading in open market repurchase (OMR) stocks will earn both positive concurrent and post-OMR excess returns. In addition, there is a significant positive relationship between pre-OMR insider trading and foreign institutional trading during the OMR period; that is, foreign institutions follow insiders to trade their OMR stocks.Practical implicationsThis study finds that foreign institutions use publicly available data on insider trading to choose OMR stocks and create excess returns. This encourages individual investors without private information, who can also earn a positive return if they diligently study available public information.Originality/valueThis study contributes to the international investment literature by determining the price impacts associated with foreigner trading in the firm-level returns of the host country. In addition, this study finds that foreign institutions choose OMRs based on insider trading information, which fills the gap in existing studies on share repurchasing. Moreover, this study enriches the insider literature by showing how foreign institutions can benefit by using insider trading information.
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Azizah, Ainul. "Criminal sanctions for insider trading: Comparison with Singapore." Jurnal Dinamika Hukum 19, no. 2 (2019): 484. http://dx.doi.org/10.20884/1.jdh.2019.19.2.2405.
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Insider trading is one of the crimes in the capital market that causes a lot of material loss to the victim. Such a large loss has caused fears of investors to trade on the capital market in Indonesia. For this reason, the government is trying to prevent insider trading, the government has made a Capital Market Law, but this is not enough. For this reason, policies need to be made relating to criminal sanctions for perpretators insider trading in the future. The research method used is the normative legal research method. With a conceptual approach, comparison and Law. The legal issues that will be examined are the legal and philosophical foundations of criminal sanctions for perpetrators insider trading and criminal law policies relating to criminal sanctions for perpetrators insider trading in the future? The result is a legal basis for criminal sanctions for perpetrators insider trading is to provide a deterrent effect to the perpetrators so that it does not happen again and protect the public from insider trading. Policies relating to criminal sanctions for perpetrators insider trading are the use of schikking in resolving insider trading and by using non-litigation methods.Keyword : criminal sanctions; insider trading; comparison.
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Beams, Joseph D., William H. Belski, and John W. Briggs. "A Test of Deterrents to Insider Trading Using Importance Ratings." Accounting and the Public Interest 8, no. 1 (2008): 94–113. http://dx.doi.org/10.2308/api.2008.8.1.94.
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ABSTRACT: The corporate scandals of 2002 led to criminal indictments of numerous executives and other employees. Legislators have increased the severity of penalties for white-collar crimes in an effort to deter such crimes; however, much previous academic research has suggested that increasing the severity of penalties does not deter criminal activity. This study asks subjects to rate which factors would most affect their decision to trade or not trade based on insider information. The results indicate that severity of penalties is the most important factor that subjects consider when faced with the decision to use insider information. Subjects rated the case-specific variables of severity of penalties, likelihood of getting caught, and expected gain as significantly more important than the subject-specific variables of guilt, social stigma, cynicism, and fairness of the insider-trading laws. The differentiation between case- and subject-specific variables is used to help explain some of the varying results of past studies. Additionally, differences in attitudes pre- and post-Enron and differences between genders are also found.
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S. Knewtson, Heather, and John R. Nofsinger. "Why are CFO insider trades more informative?" Managerial Finance 40, no. 2 (2014): 157–75. http://dx.doi.org/10.1108/mf-02-2013-0035.
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Purpose – The authors examine whether the stronger information content of chief financial officer (CFO) insider trading relative to that of chief executive officers (CEOs) results from a different willingness to exploit the information asymmetry that exists between executives and outside shareholders (scrutiny hypothesis) or from differing financial acumen between CFOs and CEOs (financial acumen hypothesis). The authors consider the information content of equity purchases for CEOs and CFOs. The paper aims to discuss these issues. Design/methodology/approach – The authors examine purchase-based insider trading portfolio returns before and after the implementation of SOX in firms with high versus low regulation, for routine and opportunistic managers, and in samples of CEOs with prior CFO experience. Findings – The authors provide evidence that SOX affected executives differently and provide support for the scrutiny hypothesis. CFO-based portfolios remain the most profitable post-SOX, but the magnitude of returns has fallen in absolute and relative terms compared to returns for CEOs. Superior financial acumen of CFOs does not appear to be supported. CEO purchase trade returns appear to be lower than CFO returns because CEOs face greater visibility and scrutiny and thus limit their own trading aggressiveness. Originality/value – This research contributes to the literature in explaining why CFOs best CEOs in their insider trading purchases and documents that in the post-SOX period, CFO insider trading superiority disappears.
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Hollifield, C. Ann. "The Specialized Business Press and Industry-Related Political Communication: A Comparative Study." Journalism & Mass Communication Quarterly 74, no. 4 (1997): 757–72. http://dx.doi.org/10.1177/107769909707400407.
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Although trade publications produce half as many copies as consumer magazines and twice as many as daily newspapers, there has been little study of their role and performance in the U.S. media system. This study compared coverage of an industry-related policy proposal, the National Information Infrastructure, by the communication-industry trade press, non-communication-industry trade press, and newspapers. The study found that trade media appear to function as an insider channel of communication in the early stages of industry-related policy processes, but that they are less likely than nonindustry-related media to cover the social implications of industry policy proposals.
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MONOYIOS, MICHAEL, and ANDREW NG. "OPTIMAL EXERCISE OF AN EXECUTIVE STOCK OPTION BY AN INSIDER." International Journal of Theoretical and Applied Finance 14, no. 01 (2011): 83–106. http://dx.doi.org/10.1142/s0219024911006279.
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We consider an optimal stopping problem arising in connection with the exercise of an executive stock option by an agent with inside information. The agent is assumed to have noisy information on the terminal value of the stock, does not trade the stock or outside securities, and maximises the expected discounted payoff over all stopping times with regard to an enlarged filtration which includes the inside information. This leads to a stopping problem governed by a time-inhomogeneous diffusion and a call-type reward. We establish conditions under which the option value exhibits time decay, and derive the smooth fit condition for the solution to the free boundary problem governing the maximum expected reward, and derive the early exercise decomposition of the value function. The resulting integral equation for the unknown exercise boundary is solved numerically and this shows that the insider may exercise the option before maturity, in situations when an agent without the privileged information may not. Hence we show that early exercise may arise due to the agent having inside information on the future stock price.
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Taleska, Ana. "European Insider Trading Theory Revisited: The Limits of the Parity-of-Information Theory and the Application of the Property Rights in Information Theory to Activist Investment Strategies." European Company and Financial Law Review 17, no. 5 (2020): 558–600. http://dx.doi.org/10.1515/ecfr-2020-0024.
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AbstractParity-of-information is purported to be the single overarching policy rationale for the European Union (EU) regulation on insider trading. This is because securities trading on the basis of informational advantages is generally prohibited under EU rules, as is tipping (and issuers’ selective disclosure) of material, non-public information. Yet, EU regulations allow market actors, including investment professionals and analysts, that have discovered valuable information -and thereby, have an informational advantage vis-à-vis their trading counterparties- to trade on this information. Relatedly, issuers of financial instruments, takeover bidders and merging parties can share information with a selected group of investors prior to public announcement of the transaction (market sounding), whereas firms can delay public disclosure of inside information and prevent all other market participants from trading on this information. I argue that these exceptions from the parity-of-information theory are -from a doctrinal standpoint- best explained as property rights in information of market actors that have developed new proprietary information with respect to European listed securities. This article, therefore, aims at providing a property rights account of the exceptions to the parity-of-information theory and it illustrates the trade-offs between the parity-of-information and the property rights in information theories underlying European insider trading rules. By extension, I analyze the specific case of activist campaigns as inside information and argue that it would be consistent with the property rights approach to allow activist investors to share their investment and trading strategies with other market participants that further their activist agenda.
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Salbu, Steven R. "Insider Trading and the Social Contract." Business Ethics Quarterly 5, no. 2 (1995): 313–28. http://dx.doi.org/10.2307/3857359.
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Abstract:The law of insider trading has progressed from an expansive approach, according to which all trading on nonpublic information was considered illegal, to a constricted approach, under which corporate outsiders are permitted to trade on nonpublic information provided such trading does not breach a fiduciary duty. This article analyzes both the former, expansive theory and the currently utilized constricted theory, within a framework of basic tenets of the American capitalist social contract regarding legitimacy of property claims. The existing constricted approach to the regulation of insider trading is found to be deficient in meeting the expectations of two core components of the social contract: it discourages procedural equality of opportunity, and it endorses claims to property that are not characterized by legitimate methods of acquisition or transfer. Because the old, expansive regulatory interpretation was more consistent with the terms of the social contract in regard to property claims, it served our economic and ethical expectations more effectively than the system presently in place. Accordingly, the article culminates in a recommendation that the expansive approach to regulating insider trading be reestablished under Unites States law.
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Sudwijayanti, Sudwijayanti. "ECONOMIC ANALYSIS OF LAW TERHADAP PEMIDANAAN INSIDER TRADING DALAM PROSES MERGER SEBAGAI KEJAHATAN KORPORASI." DiH: Jurnal Ilmu Hukum 13, no. 25 (2017): 131–48. http://dx.doi.org/10.30996/dih.v13i25.2227.
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Corporate crime is one of the crimes that arise with the advanced of economic, technological and trade liberalization activities. The problems with non-conventional crimes are due to the difficulty of clearly determining the victims and the difficulty of criminal prosecution of perpetrators. Corporate liability is also not well known in Indonesian criminal law, due to the very strong influence of the principle of sociates delinquere non-potest. One of the capital market crimes that may occur as a corporate crime is insider trading. Insider trading defined as securities trading transactions conducted by insiders by utilizing insider information that has not been published. Information on the merger as a form of corporate restructuring categorized as material facts. Merger is a legal act of one or more Companies to merge with another Company into one of existing company. In case that insider trading takes place in the merger process by the corporation, difficulty of verification for punishment will be complicated, considering the legal vacuum to convict that crime. Prosecution towards corporations, eventhough closely related to financial matters, but also intersect with purposes and functions, i.e. the protection of society and the individual offenders. Based on that purpose, Economic Analysis of Law expected to answer the legal vacuum and determine the important aspects of proper legal practice, so that a specific and appropriate punishment can be found for the offense. Considering not all penalties can be imposed on corporation. Hopefully, Economic Analysis of Law able to provide solutions for Indonesia modern criminalization.
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Noussair, Charles, and Yilong Xu. "Information mirages and financial contagion in an asset market experiment." Journal of Economic Studies 42, no. 6 (2015): 1029–55. http://dx.doi.org/10.1108/jes-08-2015-0147.
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Purpose – The purpose of this paper is to consider whether asymmetric information about correlations between assets can induce financial contagion. Contagion, unjustified by fundamentals, would arise if participants react in one market to uninformative trades in the other market that actually convey no relevant information. The authors also consider whether the market accurately disseminates insider information about fundamental value correlations when such information is indeed present. Design/methodology/approach – The authors employ experimental asset markets to answer the research questions. The experimental markets allow participants to simultaneously trade two assets for multiple rounds. In each round, a shock occurs, which either have an idiosyncratic effect on the shocked asset, or a systematic effect on both assets. Half of the time, there exist insiders who know the true nature of the shock and how it affects the value of the other asset. The other half of the time, no agent knows whether there is a correlation between the assets. In such cases, there is the potential for the appearance of information mirages. Uninformed traders, in either condition, do not know whether or not there exist insiders, but can try to infer this from the market activity they observe. Findings – The results of the experiment show that when inside information about the nature of the correlation between assets does exist, it is readily disseminated in the form of market prices. However, when there is no private information (PI), mirages are common, demonstrating that financial contagion can arise in the absence of any fundamental relationship between assets. An analysis of individual behavior suggests that some unprofitable decisions appear to be related to an aversion to complex distributions of lottery payoffs. Originality/value – The study focusses on one of the triggers of unjustified financial contagion, namely, asymmetric information. The authors have studied financial contagion in a controlled experimental setting where the authors can carefully control information, and specify the fundamental interdependence between assets traded in different markets.
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Bonaimé, Alice, Jarrad Harford, and David Moore. "Payout Policy Trade-Offs and the Rise of 10b5-1 Preset Repurchase Plans." Management Science 66, no. 6 (2020): 2762–86. http://dx.doi.org/10.1287/mnsc.2019.3322.
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We are the first to document and study the use of Rule 10b5-1 preset repurchase plans. Though the rule’s original intent was to clarify conditions for enforcing insider trading laws, generally thought to apply to individuals classified as firm insiders, we find strong use of the rule at the firm level to repurchase company stock. We exploit this new and widespread form of payout to examine an issue at the core of payout decisions—the trade-off between commitment and financial flexibility. Relative to open market repurchases, preset plans provide an expanded repurchase window and increased legal cover, albeit at the cost of reducing repurchase flexibility and the option to time repurchases. These costs and benefits are significantly associated with Rule 10b5-1 adoption: Firms with alternative sources of financial flexibility are more likely to precommit to a repurchase plan, as are firms with a history of poor repurchase timing and firms constrained by blackout windows. Consistent with preset plans signaling commitment, Rule 10b5-1 repurchase announcements are associated with greater and faster completion rates, with more positive market reactions, and with more dividend substitution than open market repurchases. Lastly, we find that preset repurchase plans represent a unique payout tool whose introduction encouraged a different set of firms to buy back stock and significantly altered the payout landscape. This paper was accepted by David Simchi-Levi, Editor-in-Chief.
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Ozik, Gideon, and Ronnie Sadka. "Skin in the Game versus Skimming the Game: Governance, Share Restrictions, and Insider Flows." Journal of Financial and Quantitative Analysis 50, no. 6 (2015): 1293–319. http://dx.doi.org/10.1017/s0022109015000587.
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AbstractThis paper advances the proposition that share restrictions engender potential conflicts of interest between fund managers and investors. Fund flows predict future fund returns for share-restricted funds, especially among funds with low levels of governance and funds managing insiders’ wealth, providing managers incentive to trade in advance of their clients. Some direct evidence for such managerial action is presented, using proprietary data on managerial investment in their own funds. The evidence suggests that private information about a fund, not necessarily its holdings, may constitute material information, with implications for proper fund governance and disclosure policy concerning managerial actions.
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Markusen, Jim. "Regional Integration and Third-Country Inward Investment." Business and Politics 6, no. 1 (2004): 1–24. http://dx.doi.org/10.2202/1469-3569.1082.
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The paper focuses on how the Free Trade Area of the Americas (FTAA), which will include both high-income developed and developing countries, will affect the options and investment strategies of multinational firms outside the region. Preliminary sections discuss the strategies open to both insider firms (headquartered with the Americas) and outsider firms, and the characteristics of technologies and countries that determine equilibrium location choices. Then I turn more explicitly to the question at hand, and suggest that a free-trade area of the Americas can be conceptually decomposed into (a) integration among the southern developing countries and (b) integration between the south and NAFTA. The first will give third-country multinationals horizontal investment opportunities to serve the effectively larger southern market with local production to serve the local southern market. The second gives third-country multinationals the opportunity to exploit low labor costs in the south to produce for export to North America (export-platform FDI). While this all sounds attractive for third-country firms, the theory emphasizes that the same advantages of integration are conferred upon U.S. and Canadian firms who have the additional advantage of supplying services and intermediate goods to southern affiliates at lower cost than the third country firms. This competitive effect from insider firms leads the theory to suggest weaker benefits to third-country firms than a simpler approach might predict.
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Francois, Joseph F., and Ganeshan Wignaraja. "Economic Implications of Asian Integration." Global Economy Journal 8, no. 3 (2008): 1850139. http://dx.doi.org/10.2202/1524-5861.1332.
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The Asian countries are once again focused on options for large, comprehensive regional integration schemes. In this paper we explore the implications of such broad-based regional trade initiatives in Asia, highlighting the bridging of the East and South Asian economies. We place emphasis on the alternative prospects for insider and outsider countries. We work with a global general equilibrium model of the world economy, benchmarked to a projected 2017 sets of trade and production patterns. We also work with gravity-model based estimates of trade costs linked to infrastructure, and of barriers to trade in services. Taking these estimates, along with tariffs, into our CGE model, we examine regionally narrow and broad agreements, all centered on extending the reach of ASEAN to include free trade agreements with combinations of the northeast Asian economies (PRC, Japan, Korea) and also the South Asian economies. We focus on a stylized FTA that includes goods, services, and some aspects of trade cost reduction through trade facilitation and related infrastructure improvements. What matters most for East Asia is that China, Japan, and Korea be brought into any scheme for deeper regional integration. This matter alone drives most of the income and trade effects in the East Asia region across all of our scenarios. The inclusion of the South Asian economies in a broader regional agreement sees gains for the East Asian and South Asian economies. Most of the East Asian gains follow directly from Indian participation. The other South Asian players thus stand to benefit if India looks East and they are a part of the program, and to lose if they are not. Interestingly, we find that with the widest of agreements, the insiders benefit substantively in terms of trade and income while the aggregate impact on outside countries is negligible. Broadly speaking, a pan-Asian regional agreement would appear to cover enough countries, with a great enough diversity in production and incomes, to actually allow for regional gains without substantive third-country losses. However, realizing such potential requires overcoming a proven regional tendency to circumscribe trade concessions with rules of origin, NTBs, and exclusion lists. The more likely outcome, a spider web of bilateral agreements, carries with it the prospect of significant outsider costs (i.e. losses) both within and outside the region.
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Figenschou, Tine Ustad, Elisabeth Eide, and Ruth Einervoll Nilsen. "Investigations of a journalistic blind spot." Nordicom Review 42, s3 (2021): 71–87. http://dx.doi.org/10.2478/nor-2021-0027.
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Abstract Recent studies argue that the contemporary working class has largely disappeared from the news media. Another strand of literature demonstrates that the traditional labour beat has lost newsroom prestige due to changes in the established news media and crisis in the labour movement. Analysing how traditional working-class sectors are covered in mainstream newspapers and trade union magazines over time, we conduct a systematic, quantitative content analysis of 18 months of coverage from 1996–2017. We find a steady decline in media coverage throughout the period, indicating that the labour beat as an established specialisation is disappearing. Studying topical emphasis and source practices demonstrates marked differences between the newspapers and the trade union magazines: The mainstream newspapers are elite- and conflict-oriented (although not hostile in their coverage), while the trade union magazines largely reflect power structures and the interests of the labour movement. In the discussion, the main findings from the content analysis are explained by practitioners, to contextualise and provide insider perspectives on the findings.
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Moran, Albert. "Reg Grundy: A Review Essay." Media International Australia 138, no. 1 (2011): 149–57. http://dx.doi.org/10.1177/1329878x1113800116.
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Adaptation and remaking are central dynamics of culture industries, most especially television. There is now a formal trade in program formats that is part of the evolution of a worldwide screen industry. However, the practice of program cloning is not new: various instances of such activity have been noticed by television historians. Yet systematic investigation of this earlier phase is largely lacking. One major reason has to do with the unavailability of insider accounts by media professionals of how program remaking worked in other times and places. Thus the recent publication of the memoirs of a leading Australian figure in this trade is a significant event. This review essay pinpoints the importance of Reg Grundy in a national and international context, and reflects upon the dynamic of cultural adaptation in the sphere of television content production.
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Marx, Paul, and Peter Starke. "Dualization as Destiny? The Political Economy of the German Minimum Wage Reform." Politics & Society 45, no. 4 (2017): 559–84. http://dx.doi.org/10.1177/0032329217726793.
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Germany is widely seen as a “dualized” economy driven by a powerful and stable “insider” coalition in the manufacturing sectors. In this article, that picture is challenged. An examination of the political economy of the outsider-friendly 2014 Minimum Wage Act, using public opinion data, document analysis, and qualitative interviews, shows how earlier dualizing reforms led to unintended negative feedback effects: First, public opinion reacted negatively to increasing inequality in the years preceding the introduction of the minimum wage. Second, a remarkable shift is found among trade unions toward support of a minimum wage, even in manufacturing. Although the threat of low-wage competition and flexibilization did play a role, trade union solidarity was at least as important. Those endogenous dynamics came together in a self-undermining process unfolding over a relatively short period of time. Potential alternative explanations are explored, including classical partisan politics, party competition, and employer preferences.
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Banaszak, Lee Ann. "Response to Liesl Haas' review of The Women's Movement Inside and Outside the State." Perspectives on Politics 9, no. 4 (2011): 887. http://dx.doi.org/10.1017/s1537592711003999.
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First, I want to thank Liesl Haas for her thoughtful and generous review of The Women's MovementInside and Outside the State. She raises two set of questions which I would like to address here. First, she asks whether a better sample of insider activists would have been found by choosing key pieces of policy and identifying the major players as she does in her own book. While every sampling strategy represents a trade-off when no clear sampling frame exists, such a method seems to me fraught with a number of dangers, including a selection bias towards visible and successful cases (which might lead us to examine only insider feminist successes and exclude those who were influential but less visible) and predefinition by the investigator of what constitutes a feminist policy. I believe one of the strengths of my study was the finding that insider feminists influenced policies ordinarily not identified as feminist—such as foreign aid legislation or scientific research in the NIH. Haas argues a change in sampling method might have increased the number of younger feminists (who were underrepresented in the sample) but their underrepresentation results largely from a focus on activists in higher positions in the bureaucracy, the tendency of fewer feminists to enter the bureaucracy under post-Reagan republican administrations, and my conscious decision to focus on the period before 2001 when interviewing so that I did not ask questions about the current administration.
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Heinrich, Steffen, Karen Shire, and Hannelore Mottweiler. "Fighting (for) the margins: Trade union responses to the emergence of cross-border temporary agency work in the European Union." Journal of Industrial Relations 62, no. 2 (2020): 210–34. http://dx.doi.org/10.1177/0022185619900649.
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Recent research suggests that trade unions in the European Union have become more receptive towards temporary and migrant workers and recognise their distinct interests. This article investigates to what extent this shift in attitude informs union responses to cross-border temporary agency work, an important variant of migrant non-standard work in the European Union. This employment form entails several potential lines of intra-labour conflicts of interests, that is, insider versus outsider and domestic versus migrant workers, and thus offers a particularly promising case to study whether and how unions seek to aggregate the interests of an increasingly heterogeneous workforce. Our findings suggest that although trade unions have gained considerable regulatory influence and new capacities to mediate conflicts of interest between different worker groups, a considerable degree of ambiguity remains in union positions and strategies towards temporary agency work and cross-border labour. Instead of gradual steps towards full inclusion of workers regardless of status and origin, union responses are best described as selective representation.