Geographic connections to China and insider trading at the start of the COVID-19 pandemic

Government Ownership and the “Public” Information Content of Insider Trading: International Evidence

“…Third, we highlight a new determinant of the macroeconomic information content of insider trades for firms with government shareholders. This evidence enriches the existing literature that explores the determinants and market implications of the macroeconomic information content of insider trades (Brochet, 2018;Henry et al, 2022;Lakonishok & Lee, 2001). Finally, we conduct an international study by stressing the importance of strong investor protection and information environment transparency in mitigating the political information advantage of SOE insiders.…”

Disaster response: The COVID-19 pandemic and insider trading around the world

“…The emergence of infectious diseases in the last two decades and the recent COVID-19 outbreaks have imposed unprecedented disruptions and uncertainty ( Baker et al, 2020 ; Bloom, Daniel, & Sevilla, 2018 ; Bloom, Kuhn, & Prettner, 2020 ). The extant literature has not thoroughly examined how informed traders respond to disease outbreaks; prior studies mainly focus on the trading behavior of certain groups of investors in the pharmaceutical industry ( Berkman & Eugster, 2017 ; Donadelli, Kizys, & Riedel, 2017 ) 3 or insider trading of firms with active connections to China ( Henry, Plesko, & Rawson, 2022 ). 4 We attempt to address this literature gap by studying the information content of insider transactions during disease outbreaks.…”

“… 4 Henry et al (2022) show that insiders of firms with operational connections to China profit from frequent stock sales following the beginning of the COVID-19 period. The authors argue that these insiders better understand the implications of publicly available information about COVID-19 and act sooner than those in firms without operational connections to China ( Henry et al, 2022 ). …”