Insider trading and information asymmetry: Evidence from the Korea Exchange

Ryu, Doojin; Yang, Heejin; Yu, Jinyoung

doi:10.1016/j.ememar.2021.100847

Cited by 15 publications

(6 citation statements)

References 91 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…While some existing studies implicitly acknowledge the existence of non‐designated liquidity providers in order‐driven environments, they neglect to identify who they are and how they respond when liquidity quickly declines. Moreover, we provide evidence supporting the theory of adverse selection costs in an order‐driven market as we show the increase in the proportion of informed traders significantly determines liquidity (Brennan et al, 2016; Easley et al, 2002; Ryu et al, 2022). This also suggests that the variation in the adverse selection cost explains the liquidity dynamics in the order‐driven market (Krinsky & Lee, 1996).…”

Section: Introductionsupporting

confidence: 77%

Who pays the liquidity cost? Central bank announcements and adverse selection

Ryu

Webb

2023

Journal of Futures Markets

Self Cite

View full text Add to dashboard Cite

This study examines whether the composition of market participants contributes to shaping market liquidity around central bank announcements. By analyzing transaction‐level data from a stock index futures market, we find that the roles of foreign and domestic institutional investors in taking or providing liquidity, respectively, are switched following the news announcements. The participation of domestic (foreign) institutions is negatively (positively) associated with liquidity provision shortly after the announcements, whereas they provide (consume) liquidity in general. The change in domestic institutions' roles is attributed to their advantages in processing local news as it is pronounced when they actively participate. Domestic individuals remain largely noisy and unresponsive. Overall, the results support the existence of adverse selection costs in the order‐driven context and imply that institutional investors may trade with the wind when they have information superiority.

show abstract

Section: Introductionsupporting

confidence: 77%

Who pays the liquidity cost? Central bank announcements and adverse selection

Ryu

Webb

2023

Journal of Futures Markets

Self Cite

View full text Add to dashboard Cite

show abstract

“…Theoretically and empirically, the aspect of celebrity endorsement or endorsement announcements has not been studied much from a retail investor's investment perspective in a stock market (Rieger, 2012). Retail investors are the least informed in financial markets to exploit undisclosed information than institutional investors in an emerging market (Ryu et al, 2021;He et al, 2022). For this reason, we theorise that retail investors' behaviour is also affected by the company's corporate identity and brand image duly augmented by celebrity endorsements.…”

Section: Introductionmentioning

confidence: 93%

Do celebrity endorsements influence stock investment intentions?

Shiva

Arora²,

Rishi³

2022

MIP

View full text Add to dashboard Cite

PurposeCelebrity endorsement is a preferred marketing communication strategy adopted by business firms. The present study suggests theoretical underpinnings for investigating the effect of celebrity endorsement on individual investors' intentions to invest in the shares of companies. The study integrates marketing communication and behavioural finance theories to understand investor behaviour in the stock market.Design/methodology/approachThe study used a questionnaire based on a conjoint analysis technique. The retail investors from India filled out the questionnaire. The authors developed an orthogonal design to generate retail investors' investment intentions and applied the full-profile conjoint method.FindingsThe results reveal that investors prefer to invest in technology-related firms when they employ entertainment celebrities to endorse their products. Investors prefer that entertainment celebrities' personalities match the single brand only they are endorsing. Further, investors choose to invest during corrective market trends in emerging economies, such as India.Originality/valueThe study offers practical implications for corporate entities and marketing professionals by analysing retail investors' investment intentions in financial markets.

show abstract

“…7 Although Korea became an influential country in terms of economic scale through rapid economic growth, it exhibited weak economic conditions during our sample period 1998-2012. For example, Ryu et al (2021) argue that the Korean equity market is still regarded as an emerging market because it is vulnerable to corruption and illegal acts. Moreover, according to Groh and Wallmeroth (2016), Korea ranks 30th in the legal rights index, 31st in the corruption perception index and 52nd in the intellectual property protection index out of 118 countries for the period from 2000 to 2013.…”

Section: Source: Ministry Of Smes and Startupsmentioning

confidence: 99%

Does venture capital investment enhance corporate innovation? Evidence from Korea

Lee

Shin

et al. 2022

Business Fin & Account

View full text Add to dashboard Cite

We examine whether venture capital (VC) investment enhances corporate innovation in Korea. Using a matched sample of 802 firms from 1998 to 2012, we find that after the first round of VC investment, VC‐backed firms are more innovative than non‐VC‐backed firms. Our results suggest that the positive influence of VC investment largely comes from the ability of VC firms to reduce information asymmetry between investors and ventures: VC funds managed by independent venture capitalists significantly enhance corporate innovation, whereas those managed by governmental venture capitalists do not. Furthermore, this positive influence becomes more pronounced where there is greater information asymmetry. Finally, we show that funds with profit‐based compensation structures are more likely to encourage corporate innovation than those with fee‐based compensation structures.

show abstract

Insider trading and information asymmetry: Evidence from the Korea Exchange

Cited by 15 publications

References 91 publications

Who pays the liquidity cost? Central bank announcements and adverse selection

Who pays the liquidity cost? Central bank announcements and adverse selection

Do celebrity endorsements influence stock investment intentions?

Does venture capital investment enhance corporate innovation? Evidence from Korea

Contact Info

Product

Resources

About