Insider Investment Horizon

65 Pages Posted: 17 Mar 2017  

Ferhat Akbas

University of Illinois at Chicago

Chao Jiang

University of South Carolina - Department of Finance

Paul D. Koch

University of Kansas - Finance Area

Date Written: March 2017

Abstract

We examine the relation between insiders’ investment horizons and the informativeness of their trading activity regarding future stock returns. We show that both purchases and sales by short horizon insiders are more informative than those by long horizon insiders. Short horizon insiders better predict earnings surprises and large stock price changes. They also tend to come from firms with weaker corporate governance, be male, hold MBA or non-PhD degrees, and trade less following SEC investigations. Overall, our findings show that investment horizon of an insider is significantly associated with the informativeness of the insider’s trades.

Keywords: Insider trading, investment horizon, information asymmetry

JEL Classification: G12, G14, G18

Suggested Citation

Akbas, Ferhat and Jiang, Chao and Koch, Paul D., Insider Investment Horizon (March 2017). Available at SSRN: https://ssrn.com/abstract=2934007 or http://dx.doi.org/10.2139/ssrn.2934007

Ferhat Akbas

University of Illinois at Chicago ( email )

1200 W Harrison St
Chicago, IL 60076
United States

Chao Jiang (Contact Author)

University of South Carolina - Department of Finance ( email )

1014 Greene Street
Columbia, SC 29208
United States

Paul D. Koch

University of Kansas - Finance Area ( email )

1300 Sunnyside Avenue
Lawrence, KS 66045
United States

Paper statistics

Downloads
96
Rank
228,898
Abstract Views
548