Corporate governance and the profitability of insider trading

Dai, Lili; Fu, Renhui; Kang, Jun‐Koo; Lee, Inmoo

doi:10.1016/j.jcorpfin.2016.08.002

Cited by 137 publications

(99 citation statements)

References 68 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…For instance, prior work shows that conditional conservatism lowers agency conflicts and is associated with improvements in firm corporate governance and greater institutional ownership (Beekes et al., 2004; Ahmed & Duellman, 2007; Ramalingegowda & Yu, 2012; Chen, Ni, & Zhang, 2018). This evidence links with prior work on the profitability of insider trading, which indicates that, on average, better‐governed firms have lower profitability of insider sales (Dai, Fu, Kang, & Lee, 2016), and that greater institutional ownership is negatively related with the profitability of insider trading (Bricker & Markarian, 2015).…”

Section: Literature Review and Hypothesis Developmentsupporting

confidence: 81%

See 1 more Smart Citation

Accounting conservatism and the profitability of corporate insiders

Khalilov

Osma

2020

Business Fin & Account

View full text Add to dashboard Cite

We predict that accounting conservatism influences insiders' opportunities to speculate on good and bad news, and thus, insider trading profitability. We find that greater conditional (unconditional) conservatism is associated with lower (higher) insiders' profitability from sales. We find limited evidence that conservatism influences profitability from purchases. These findings are consistent with our hypotheses on the different informational roles of conditional and unconditional conservatism, and on the asymmetric influence of conservatism over the opportunities to speculate on good versus bad news. Our research design takes into consideration the endogenous nature of insiders' trading and conservatism. The results are robust to different measures of conservatism and a number of additional analyses. K E Y W O R D S conditional conservatism, insider trading sales and purchases, profitability from insider trading, unconditional conservatism J E L C L A S S I F I C AT I O N G30, M41

show abstract

Section: Literature Review and Hypothesis Developmentsupporting

confidence: 81%

“…Finally, Dai et al. (2016) find that corporate governance reduces profitability of insider sales. We use a composite proxy of corporate governance to examine whether our previous results are driven by underlying governance structures.…”

Section: Additional Analysesmentioning

confidence: 99%

Accounting conservatism and the profitability of corporate insiders

Khalilov

Osma

2020

Business Fin & Account

View full text Add to dashboard Cite

show abstract

“…The evidence in Ramalingegowda and Yu (2012) indicates that there is a positive relationship between accounting conservatism and institutional ownership, and Ahmed and Duellman (2007) show that conservatism is positively related with corporate governance. This evidence links with prior work on the profitability of insider trading, which indicates that, on average, bettergoverned firms have lower profitability of insider sales (Dai et al 2016), and that greater institutional ownership is negatively related with the profitability of insider trading (Bricker and Markarian 2015). In closely linked research, the work of He and Rui (2016) finds a convex relationship between market returns of insider purchases and ownership concentration.…”

Section: Conditional Conservatism and The Opportunities Of Insiders Tsupporting

confidence: 73%

Accounting Conservatism and the Profitability of Corporate Insiders

Khalilov

Osma

2019

SSRN Journal

View full text Add to dashboard Cite

“…In this quest, some studies examine the relationship between corporate governance and some financial indicators. They found that there is a significant and negative relationship between corporate governance and leverage; (Nadarajah et al, 2016), negative relationship between board size and cash holding; (Al-najjar & Clark 2017), the FR categories of solvency and profitability and the CGI categories of board structure and ownership structure are the most important features in bankruptcy prediction; , and better governed firms reduce the profitability of insider sale; (Dai et al, 2016). Contradictory, (Ramli & Ramli 2016) found that all board attributes fail to prove their significant influence on the profit moderation as well as profit maximization.…”

Section: Literature Reviewmentioning

confidence: 99%

Unified Corporate Governance Practice of Trade Partners with India: Towards International Code of Best Practices

Shamim

Fatima

Almaqtari

2018

JESP

View full text Add to dashboard Cite

This paper investigates the uniformity of corporate governance practices towards international code of best practices. The top 5 trading partner countries with India and export network worldwide have been selected, then from each country, 5 companies are selected which are leading in merchandise export. This study is based on secondary data sourced from published annual reports of the listed companies for the financial year from 2015 to 2017. The study employs descriptive statistics and ANOVA to evaluate the uniformity of corporate governance practices namely; some board characteristics, board committees, listing abroad, international segment or branch, and international governance indicators. It has found that there is statistical significance at the level of 5% that companies follow uniform corporate governance practices relating to board characteristics, board committees, listing abroad, having international segment, and international governance indicators except for executive members, risk management committee, corporate governance and grievance committee, total assets and sales of the company. It is recommended that countries and international bodies should encourage companies toward uniformity of corporate governance.

show abstract

Corporate governance and the profitability of insider trading

Cited by 137 publications

References 68 publications

Accounting conservatism and the profitability of corporate insiders

Accounting conservatism and the profitability of corporate insiders

Accounting Conservatism and the Profitability of Corporate Insiders

Unified Corporate Governance Practice of Trade Partners with India: Towards International Code of Best Practices

Contact Info

Product

Resources

About