Aleksanyan, M. , Danbolt, J., Siganos, A. and Wu, B. (H.T.) (2022) I only fear when I hear: how media affects insider trading in takeover targets. Journal of Empirical Finance, 67, pp. 318-342. (doi: 10.1016/j.jempfin.2022.04.004)
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Abstract
We study how target firm insiders respond to Wall Street Journal articles referring to illegal insider trading in past mergers. Such articles lead to target insider share purchases before bid announcement to drop by 75%. This effect is stronger nearer the bid announcement and increases with article visibility. It remains significant after controlling for public enforcement intensity, but is weakened by the greater potential for profitable trading. Our results suggest insider trading articles temporarily heighten the perception of litigation and reputation risks. Overall, our study indicates that such articles have a meaningful short-term deterrence effect on opportunistic insider trading, and highlights the disciplinary role of the media.
Item Type: | Articles |
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Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Wu, Dr Betty and Siganos, Professor Antonios and Aleksanyan, Dr Mark |
Creator Roles: | Aleksanyan, M.Conceptualization, Writing – original draft, Writing – review and editing, Validation Siganos, A.Conceptualization, Methodology, Formal analysis, Writing – original draft, Writing – review and editing, Validation Wu, B. (H.T.)Conceptualization, Methodology, Investigation, Data curation, Formal analysis, Writing – original draft, Writing – review and editing, Visualization, Validation |
Authors: | Aleksanyan, M., Danbolt, J., Siganos, A., and Wu, B. (H.T.) |
College/School: | College of Social Sciences > Adam Smith Business School College of Social Sciences > Adam Smith Business School > Accounting and Finance |
Journal Name: | Journal of Empirical Finance |
Publisher: | Elsevier |
ISSN: | 0927-5398 |
ISSN (Online): | 1879-1727 |
Published Online: | 20 April 2022 |
Copyright Holders: | Copyright © 2022 The Authors |
First Published: | First published in Journal of Empirical Finance 67: 318-342 |
Publisher Policy: | Reproduced under a Creative Commons License |
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