The Determinants of Regulatory Compliance: An Analysis of Insider Trading Disclosures in Italy

Posted: 2 Oct 2009 Last revised: 14 May 2010

See all articles by Emanuele Bajo

Emanuele Bajo

University of Bologna - Department of Management

Marco Bigelli

University of Bologna - Department of Management

David Hillier

University of Strathclyde - Department of Accounting and Finance

Barbara Petracci

University of Bologna- Department of Management

Date Written: October 2, 2009

Abstract

This paper investigates the determinants of regulatory compliance in corporate organizations. Exploiting a unique enforcement and reporting framework for insider trading in Italy, we present three main findings. First, board governance, such as chief executive-chairman duality and the proportion of non-executive directors, does not increase the propensity of firms to comply with regulation. Second, family firms and firms with a high degree of separation of ownership from control are most likely to comply with regulation. Third, corporate ethos is more important in predicting regulatory compliance than explicit corporate governance structures.

Keywords: regulatory compliance, corporate governance, insider trading, regulation, Italy, family firms

JEL Classification: G14, G38

Suggested Citation

Bajo, Emanuele and Bigelli, Marco and Hillier, David and Petracci, Barbara, The Determinants of Regulatory Compliance: An Analysis of Insider Trading Disclosures in Italy (October 2, 2009). Journal of Business Ethics, Vol. 90, No. 3, pp. 331-343, 2009. Available at SSRN: https://ssrn.com/abstract=1481660

Emanuele Bajo

University of Bologna - Department of Management ( email )

Via Capo di lucca, 34
Bologna, 40126
Italy
+39 051 209 8091 (Phone)
+39 051 246411 (Fax)

Marco Bigelli (Contact Author)

University of Bologna - Department of Management ( email )

Via Capo di Lucca 34
Bologna, 40126
Italy
+39 051 2098060 (Phone)
+39 051 6390612 (Fax)

David Hillier

University of Strathclyde - Department of Accounting and Finance ( email )

Curran Building
100 Cathedral Street
Glasgow G4 0LN
United Kingdom
44 0141 330 4809 (Phone)
44 0141 330 4442 (Fax)

Barbara Petracci

University of Bologna- Department of Management ( email )

Via Capo di Lucca 34
Bologna, 40100
Italy

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