The insider trading policy is an aspect of a firm's internal governance which ensures corporate transparency is maintained and promotes investor confidence. We examine the effect of trading policies on the returns to trades conducted by corporate insiders in a period where the adoption of a...

This paper examines the accruals anomaly in an agency context where managers of overvalued firms engage in various activities, including accruals-based earnings management, to sustain overvaluation. We use managerial trading to operationalize the empirical investigation, hypothesizing that...

This paper examines the influence of corporate governance systems on insiders' ability to profit from their information advantage and the ways through which corporate governance systems influence such ability. We find that corporate governance significantly reduces the profitability of insider...

Since insider transactions are implemented through personal accounts, the NYSE classifies these trades as retail transactions. Indeed, imbalances of retail trading and insider trading move in lockstep and predict stock returns in the cross-section. A high-minus-low strategy in retail trading...

We show that trades by corporate insiders after an earnings announcement determine in part the extent of the post-earnings announcement drift anomaly. Contrarian trades mitigate the under-reaction to earnings announcements, and confirmatory trades allow for price discovery with price movements...

Both short-term momentum and long-term reversal are attributable to investors underreacting to preceding insider trading information. Past winners (losers) continue to earn significant positive (negative) returns in the short term only if their insider trading activity indicates positive...

China has sustained a rapid rate of economic growth and absorbed a great deal of foreign investment over the past decades. However, the laws pertaining to business in China have not kept up with China's market growth. For this reason, investors in the Chinese stock market must assess associated...

We investigate whether investors are misled by firms that exclude particular expenses in calculating non-GAAP earnings in order to beat analysts' earnings forecasts. Our empirical analyses suggest that firms that pursue a strategy of non-GAAP reporting to beat analysts' earnings forecasts not...

The paper discovers that firm complexity is negatively priced in cross-section. High/low-complexity conglomerates have 35-50/20-28 bp per month more negative five-factor Fama and French (2015) alphas than single-segment firms, and this effect is stronger in subsamples with low institutional...

Merger activity tends to peak at times of high stock prices. I examine the allocation of equity issue proceeds conditional on the level of merger activity to shed light on the source of this empirical regularity. I find that firms do not allocate more of the equity proceeds raised in high merger...