Managers and Investor Sentiment

Hribar, Paul; Quinn, Phillip J.

doi:10.2139/ssrn.2240631

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Managers and Investor Sentiment

41 Pages Posted: 20 Apr 2013

See all articles by Paul Hribar

Paul Hribar

University of Iowa - Department of Accounting; University of Iowa - Henry B. Tippie College of Business

Phillip J. Quinn

University of Washington Foster School of Business

Date Written: January 24, 2013

Abstract

We examine the relation between managerial trading and market sentiment. We investigate whether managers' trades are associated with changes in market sentiment, and we find they are negatively related. We then explore cross-sectional differences in managerial trading and find trading against sentiment is strongest in firms that are difficult-to-value, such as small firms and loss firms. Our results are robust to controlling for other determinants of insider trading, including insiders' tendency to be contrarian investors, wealth diversification concerns, tax-motivated selling, and CEO overconfidence.

Keywords: investor sentiment, insider trading, voluntary disclosure

JEL Classification: M10, M40, M41, G29, G30, E44

Suggested Citation: Suggested Citation

Hribar, Paul and Quinn, Phillip J., Managers and Investor Sentiment (January 24, 2013). Available at SSRN: https://ssrn.com/abstract=2240631 or http://dx.doi.org/10.2139/ssrn.2240631