Profitability of Insider Trading in Europe: A Performance Evaluation Approach

67 Pages Posted: 26 Jul 2012 Last revised: 12 May 2017

See all articles by Bartosz Gebka

Bartosz Gebka

University of Newcastle Business School

Adriana Korczak

University of Bristol

Piotr Korczak

University of Bristol - Department of Finance and Accounting

Jędrzej Traczykowski

Polska Telefonia Cyfrowa S.A.- Data Mining and Segmentation Unit

Date Written: May 11, 2017

Abstract

We use the largest cross-country sample of reported share transactions by corporate insiders to date to establish that insiders in the majority of European countries do not make statistically significant abnormal trading profits. This finding stands in contrast to the earlier evidence from the U.S. The result holds across subsamples of firms with different characteristics. Furthermore, the introduction of the European Union Market Abuse Directive (MAD) had a mixed impact on the frequency and volume of insider trading across countries but generally did not affect profits of insider-mimicking portfolios. We build on the heterogeneity of our sample countries to show that several country-level regulatory, economic and cultural factors are linked with the level of insider profits which can explain why the profitability of insider trading differs starkly across countries.

Keywords: Insider trading, portfolio, profits, Europe, MAD

JEL Classification: G11, G14, G18

Suggested Citation

Gebka, Bartosz and Korczak, Adriana and Korczak, Piotr and Traczykowski, Jędrzej, Profitability of Insider Trading in Europe: A Performance Evaluation Approach (May 11, 2017). Available at SSRN: https://ssrn.com/abstract=2117121 or http://dx.doi.org/10.2139/ssrn.2117121

Bartosz Gebka

University of Newcastle Business School ( email )

Newcastle upon Tyne, NE1 4SE
United Kingdom
+44 191 208 1578 (Phone)

HOME PAGE: http://https://www.ncl.ac.uk/business-school/staff/profile/bartoszgebka.html#publications

Adriana Korczak

University of Bristol ( email )

8 Woodland Road
Bristol, BS8 1TN
United Kingdom
+441173941490 (Phone)

Piotr Korczak (Contact Author)

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

8 Woodland Road
Bristol BS8 1TN
United Kingdom
+44 117 394 1491 (Phone)

HOME PAGE: http://sites.google.com/view/piotrkorczak/home

Jędrzej Traczykowski

Polska Telefonia Cyfrowa S.A.- Data Mining and Segmentation Unit ( email )

Al. Jerozolimskie 181
Warsaw, 02-222
Poland

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
365
Abstract Views
1,965
rank
115,800
PlumX Metrics