TY - JOUR
T1 - Insiders' incentives for asymmetric disclosure and firm-specific information flows
AU - Jiang, Li
AU - Kim, Jeong-Bon
AU - Pang, Lei
PY - 2013/9
Y1 - 2013/9
N2 - Recent research suggests that insiders' incentives for capturing cash flows affect price formation process in which insiders are inclined to withhold good news and to accelerate the release of bad news (Jin and Myers, 2006). We investigate whether insiders' incentives for private control benefit, proxied by control-ownership wedge, affect firm-specific return characteristics. We find that control-ownership wedge is negatively related to the likelihood of positive return jumps and positively related to the extent of asymmetric market reaction to good news rather than to bad news. Overall, our results support the notion that corporate insiders increase opaqueness and withhold good news in order to capture unexpected cash flow. © 2013 Elsevier B.V.
AB - Recent research suggests that insiders' incentives for capturing cash flows affect price formation process in which insiders are inclined to withhold good news and to accelerate the release of bad news (Jin and Myers, 2006). We investigate whether insiders' incentives for private control benefit, proxied by control-ownership wedge, affect firm-specific return characteristics. We find that control-ownership wedge is negatively related to the likelihood of positive return jumps and positively related to the extent of asymmetric market reaction to good news rather than to bad news. Overall, our results support the notion that corporate insiders increase opaqueness and withhold good news in order to capture unexpected cash flow. © 2013 Elsevier B.V.
KW - Control-ownership wedge
KW - Jump risks
KW - Stock price informativeness
KW - Timing of disclosure
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U2 - 10.1016/j.jbankfin.2013.05.001
DO - 10.1016/j.jbankfin.2013.05.001
M3 - RGC 21 - Publication in refereed journal
SN - 0378-4266
VL - 37
SP - 3562
EP - 3576
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
IS - 9
ER -