Economics, Econometrics and Finance
4 years ago

Insider Trading Laws Reduce Equity Costs After First Prosecution.

The Journal of Finance
The World Price of Insider Trading
Utpal Bhattacharya, Hazem Daouk

Paper Summary

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The study looked at insider trading laws in 103 countries with stock markets. 87 countries have these laws, but only 38 enforce them through prosecutions. Before 1990, only 34 countries had insider trading laws, and 9 enforced them. The cost of equity in a country doesn't change with insider trading laws, but decreases significantly after the first prosecution.