The macroeconomic policy environment affects the internal governance of microenterprises, which may provide opportunities for management to benefit from stock sales while decreasing its motivation to manipulate stock transactions. Using a sample of Chinese A-share listed companies from 2007 to...

Do illegal insiders internalize legal risk? We address this question with hand-collected data from530 SEC investigations. Using two plausibly exogenous shocks to expected penalties, we showthat insiders trade less aggressively and earlier and concentrate on tips of greater value whenfacing...