Is there information content from insider trading activities preceding earnings and dividend announcements in Hong Kong?

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

10 Scopus Citations
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Author(s)

  • Louis T. W. Cheng
  • T. Y. Leung

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)417-437
Journal / PublicationAccounting and Finance
Volume48
Issue number3
Publication statusPublished - Sep 2008

Abstract

This study examines whether insiders (directors) exploit information advantage of their firms by trading stocks before the simultaneous earnings and dividend announcements in Hong Kong. Our findings show that there are significant net-insider-buying activities before the announcements of good news ('Earnings-Dividend Increase') and significant net-insider-selling activities before bad news ('Earnings-Dividend Decrease' and 'Earnings Decrease-Dividend Zero'). In addition, our regression results provide some support for the hypothesis that there is a predictive relation between pre-event insider trading activity and the abnormal return of the announcements. © 2007 The Authors.

Research Area(s)

  • Corporate governance, Dividends, Earnings, Insider trading