By addressing the interaction between security market microstructure and the generalized agency conflict between managers and shareholders, we study the effects of informed insider trading on productive efficiency, price discovery, and wealth redistribution. Insider trading can lead...

We present fresh evidence on the validity of the dividend signaling hypothesis (DSH), by using a new testing approach. We test the unambiguous prediction from the DSH that the association between current dividend changes and future profitability is stronger for firms with higher marginal net...

We examine voluntary disclosure and capital investment by an informed manager in an initial public offering (IPO) in the presence of informed and uninformed investors. We find that in equilibrium, disclosure is more forthcoming — and investment efficiency is lower — when a greater fraction...