Global Economic Impact of COVID-19: Evidence from Insider Trades

41 Pages Posted: 10 Jun 2020

See all articles by Deniz Anginer

Deniz Anginer

Simon Fraser University (SFU)

Anil Donmez

Simon Fraser University (SFU), Faculty of Arts & Social Sciences, Department of Economics, Students

H. Nejat Seyhun

University of Michigan, Stephen M. Ross School of Business

Ray Zhang

Simon Fraser University (SFU)

Date Written: May 20, 2020

Abstract

We examine insider trades around the onset of the COVID-19 pandemic. Insiders purchased shares in record numbers after the stock market decline that began in late February 2020. We find that insider purchases were more pronounced for larger firms, value firms, firms with high levels of leverage as well as firms in the finance, energy and consumer nondurable sectors. These results suggest that insiders believe the impact of COVID-19 on global economic activity and the stock prices of their companies to be temporary. We also find some evidence of opportunistic insider selling in January and February 2020 prior to the stock market decline, suggesting that some insiders anticipated the decline. Finally, we find similar patterns in insider trading in Canada, Italy, Spain and South Korea, but a more muted response in China. Our results indicate that insiders’ private information became especially valuable during this period of significant market disruption.

Keywords: Insider Trading, COVID-19, Coronavirus, Pandemic

JEL Classification: G11, G12, G14, G17

Suggested Citation

Anginer, Deniz and Donmez, Anil and Seyhun, H. Nejat and Zhang, Ray, Global Economic Impact of COVID-19: Evidence from Insider Trades (May 20, 2020). Available at SSRN: https://ssrn.com/abstract=3624403 or http://dx.doi.org/10.2139/ssrn.3624403

Deniz Anginer (Contact Author)

Simon Fraser University (SFU) ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

Anil Donmez

Simon Fraser University (SFU), Faculty of Arts & Social Sciences, Department of Economics, Students ( email )

British Columbia
Canada

H. Nejat Seyhun

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-763-5463 (Phone)

Ray Zhang

Simon Fraser University (SFU) ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

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