Insider Trading in Multinational Firms

43 Pages Posted: 3 Aug 2022

See all articles by Dallin Alldredge

Dallin Alldredge

Florida International University

Brian Blank

Mississippi State University

Date Written: July 27, 2022

Abstract

We explore insider trading at multinational firms and find multinational firm insiders make larger trades followed by larger abnormal returns relative to those at domestic firms. Multinational firm insider trading profits are concentrated among top-level insiders (CEO, President and Chairman), and abnormal returns are higher when investor attention is low and when stocks are relatively inexpensive. Further, we find insider trading profits are highest at multinational firms make foreign sales to regions of high cultural and linguistic difference from the United States, suggesting information diffusion plays an important role in the trading differences between insiders at domestic and multinational firms.

Keywords: insider trading; foreign information; limited attention

JEL Classification: G14, F23, G30

Suggested Citation

Alldredge, Dallin and Blank II, Douglas Brian, Insider Trading in Multinational Firms (July 27, 2022). Available at SSRN: https://ssrn.com/abstract=4174541 or http://dx.doi.org/10.2139/ssrn.4174541

Dallin Alldredge (Contact Author)

Florida International University ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Douglas Brian Blank II

Mississippi State University ( email )

Mississippi State, MS 39762
United States
(662) 325-5910 (Phone)

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