Do Insider Trading Patterns Indicate a Firm's R&D Productivity: Evidence from U.S. Patenting Firms

Rong, Zhao

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Do Insider Trading Patterns Indicate a Firm's R&D Productivity: Evidence from U.S. Patenting Firms

Journal of Accounting and Finance, Forthcoming

27 Pages Posted: 17 Jan 2013

See all articles by Zhao Rong

Zhao Rong

Wenlan School of Business, Zhongnan University of Economics and Law

Date Written: October 17, 2012

Abstract

It is hard to evaluate a firm’s R&D performance in a timely manner due to the uncertainties involved in the R&D process. By examining the U.S. listed firms with heavy patenting during 1987-1998, I find that the effects of a firm’s insider trading patterns are significant in explaining the contemporaneous fluctuations in its R&D productivity. This finding is consistent with the hypothesis that management has considerable information about its R&D productivity beyond what is known to outside investors.

Keywords: patent, R&D productivity, insider trading, information asymmetry

Suggested Citation: Suggested Citation

Rong, Zhao, Do Insider Trading Patterns Indicate a Firm's R&D Productivity: Evidence from U.S. Patenting Firms (October 17, 2012). Journal of Accounting and Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2202093