Insider Trading Around Earnings Announcements in Indian Firms

Posted: 17 Nov 2016

See all articles by Sudipta Nanda

Sudipta Nanda

Vinod Gupta School of Management, Indian Institute of Technology (IIT), Kharagpur.

Parama Barai

XLRI Jamshedpur - School of Human Resources

Date Written: November 16, 2016

Abstract

We use a modified event study method with variable event windows to explore whether firm insiders earn abnormal returns by trading before earning announcements. We also try to find out the variables that affect abnormal returns. We find that insiders earn abnormal returns from purchases but suffer losses from sales. These insights would go undetected if standard event study methods were employed. Finally, abnormal return depends on firm earnings, market capitalization, opportune number of days and type of insider transaction.

Keywords: Insider Trading, Event study method, Earnings announcements

JEL Classification: G14

Suggested Citation

Nanda, Sudipta and Barai, Parama, Insider Trading Around Earnings Announcements in Indian Firms (November 16, 2016). 8th Conference on Financial Markets and Corporate Governance (FMCG) 2017, Available at SSRN: https://ssrn.com/abstract=2870474

Sudipta Nanda (Contact Author)

Vinod Gupta School of Management, Indian Institute of Technology (IIT), Kharagpur. ( email )

Kharagpur
India

Parama Barai

XLRI Jamshedpur - School of Human Resources ( email )

C H Area (E)
Jamshedpur, Jharkhand 831001
India

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