Abstract

http://ssrn.com/abstract=1138723
 
 

References (72)



 
 

Citations (6)



 


 



Corporate Governance and the Information Content of Insider Trades


Alan D. Jagolinzer


University of Colorado - Leeds School of Business

David F. Larcker


Stanford University - Graduate School of Business

Daniel J. Taylor


University of Pennsylvania - The Wharton School

June 1, 2011

Journal of Accounting Research 49 (Dec 2011): 1249-1274.
Rock Center for Corporate Governance at Stanford University Working Paper No. 3

Abstract:     
Most corporate governance research focuses on the behavior of chief executive officers, board members,institutional shareholders, and other similar parties. Little research focuses on the impact of executives whose primary responsibility is to enforce and shape corporate governance inside the firm. This study examines the role of the general counsel in mitigating informed trading by corporate insiders. We find that insider trading profits and the predictive ability of insider trades for future operating performance are generally higher when insiders trade within firm-imposed restricted trade windows. However, when general counsel approval is required to execute a trade,insiders’ trading profits and the predictive ability of insider trades for future operating performance are substantively lower. Thus, when given the authority, it appears the general counsel can effectively limit the extent to which corporate insiders use their private information to extract rents from shareholders.

Number of Pages in PDF File: 42

Keywords: corporate governance, insider trading, insider trading policies, general counsel, restricted trade windows

JEL Classification: G34, J33, K31, M52

Accepted Paper Series


Download This Paper

Date posted: May 29, 2008 ; Last revised: November 6, 2012

Suggested Citation

Jagolinzer, Alan D. and Larcker, David F. and Taylor, Daniel J., Corporate Governance and the Information Content of Insider Trades (June 1, 2011). Journal of Accounting Research 49 (Dec 2011): 1249-1274.; Rock Center for Corporate Governance at Stanford University Working Paper No. 3. Available at SSRN: http://ssrn.com/abstract=1138723

Contact Information

Alan D. Jagolinzer
University of Colorado - Leeds School of Business ( email )
419 UCB
Boulder, CO 80309-0419
United States
David F. Larcker (Contact Author)
Stanford University - Graduate School of Business ( email )
Graduate School of Business
518 Memorial Way
Stanford, CA 94305-5015
United States
650-725-6159 (Phone)

Daniel Taylor
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Feedback to SSRN


Paper statistics
Abstract Views: 3,668
Downloads: 975
Download Rank: 11,569
References:  72
Citations:  6

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.328 seconds