Business, Management and Accounting
4 years ago

Insider trading in Germany linked to significant abnormal returns.

RePEc: Research Papers in Economics
Insider trading and corporate governance: The case of Germany
André Betzer, Erik Theissen

Paper Summary

Insider trading in Germany leads to significant abnormal returns, especially before earnings announcements. UK regulations banning insider trading before earnings announcements are justified. The ownership structure and accounting standards of a firm influence the price reaction to insider trades. The position of the insider within the firm does not impact price reactions, contradicting the informational hierarchy hypothesis.

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