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Abstract

In this paper, we investigate the insider trading patterns of the Greek Stock Exchange Market before and after the outburst of the Greek Financial Crisis. Using the event study methodology, we examine and compare the relationship between insider trading and corporate governance structures, for 14 firms of the Greek Technology sector listed in ATHEX for the periods 2007-2010 and 2010-2013. Our results suggest that there are structural differences in the patterns of insider trading and the relationship that it has with the corporate governance and the ownership structure of the firms for the two time periods examined differences that should be attributed to the financial crisis. Although ownership structure does not seem to have an important effect on stock returns, separation of ownership and control, and the board of directors had a significant effect during the period of the financial crisis.

The Relationship of Insider Trading Announcements, Ownership Structure and Corporate Governance: An Event Study Analysis of Athens Stock Exchange Market Technology Firms

“…Our paper adds to the relevant literature on corporate governance in numerous ways. First of all, our work extends the limited work performed on the subject for Greece (Lekkas, 1998;Leledakis et al, 2010;Thalassinos et al, 2012;Antoniadis et al, 2017Antoniadis et al, , 2019. Second, our survey focuses on one sector, and by comparing it with similar studies, can provide evidence of different insider behavior in different sectors.…”

“…The examination of a bigger sample of announcements, that would include other industries as well, and would focus on the transactions performed solely by the executive members of the Board, could provide more conclusive results on this relationship. The interpretation of the above findings should also take under consideration the examined period, where the unfavorable economic environment influenced heavily the Greek Stock market and the way the firms examined operated (Antoniadis et al, 2019). That adverse economic and financial environment could lead insiders of Greek firms to execute transactions for reasons other than the ones suggested by the relevant literature (Hamill et al, 2002;Antoniadis et al, 2019).…”

“…Their findings indicate that buying transactions do not affect abnormal stock returns while selling transactions have a positive effect before the announcement and negative afterward. Antoniadis et al (2017Antoniadis et al ( , 2019, also found that there has been a change in the patterns of trading by insiders as a result of the financial crisis in Greece after 2010, and especially for the period following the transaction.…”

“…The model that we are going to estimate is shown in equation (4), including variables that are presented and used in the relevant literature (Antoniadis et al, 2017(Antoniadis et al, , 2019. As a dependent variable we are going to use the effect that insider trading to the stock prices measured by CAR, and as independent variables 3 sets of corporate governance variables related to ownership structure, the identity and the capacity of the insiders, and financial characteristics of the firms, as were identified by relevant literature in Section 2.…”

“…The TRNVOL variable is used to capture the effect that the volume of the transaction has on abnormal returns, and to screen the incentives of the performed transaction, whether informative or liquidity seeking. The ownership structure variables BLOCK and OWNCONC examine the relationship between ownership structure and abnormal returns, and tests the monitoring hypothesis through diminished agency costs as a result of the existence of blockholders (Adams et al, 2005;Fidrmuc et al, 2006;Betzer & Theissen, 2009;Antoniadis et al, 2019). Finally, the ownership and control separation issue is included in our model with the OWN_CONT variable, shedding light in the nature of the agency problem faced by Greek firms.…”