Insider Trading Restrictions and Analysts' Incentives to Follow Firms
Motivated by extant finance theory predicting that insider trading crowds out private information acquisition by outsiders, we use data for 100 countries for the years 1987-2000 to study whether analyst following in a country increases following restriction of insider trading activities. We document that analyst following increases after initial enforcement of insider trading laws. This increase is concentrated in emerging market countries, but is smaller if the country has previously liberalized its capital market. We also find that analyst following responds less intensely to initial enforcement when a country has a preexisting portfolio of strong investor protections. Copyright 2005 by The American Finance Association.
Year of publication: |
2005
|
---|---|
Authors: | BUSHMAN, ROBERT M. ; PIOTROSKI, JOSEPH D. ; SMITH, ABBIE J. |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 60.2005, 1, p. 35-66
|
Publisher: |
American Finance Association - AFA |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Capital allocation and timely accounting recognition of economic losses
Bushman, Robert M., (2011)
-
Insider trading restrictions and analysts incentives to follow firms
Bushman, Robert M., (2005)
-
What Determines Corporate Transparency?
Bushman, Robert M., (2017)
- More ...