The Determinants of Regulatory Compliance: An Analysis of Insider Trading Disclosures in Italy
Posted: 2 Oct 2009 Last revised: 14 May 2010
Date Written: October 2, 2009
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: Suggested Citation