The World Price of Insider Trading

Bhattacharya, Utpal; Daouk, Hazem

doi:10.1111/1540-6261.00416

Cited by 1,022 publications

(364 citation statements)

References 32 publications

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“…Thus, strong investor protection should be associated with more active foreign markets. We measure insider trading protection by a dummy variable set to zero before insider trading laws are enforced and one thereafter, using the data in Bhattacharya and Daouk (2002). Shareholder protection, instead, is measured on a discrete scale between zero (lowest protection) and six (highest protection), and is drawn from La Porta et al (1998).…”

Section: Data Descriptionmentioning

confidence: 99%

Where Is the Market? Evidence from Cross-Listings in the United States

Halling¹,

Pagano²,

Randl³

et al. 2007

Rev. Financ. Stud.

116

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We analyze the location of stock trading for firms with a US cross-listing. The fraction of trading that occurs in the United States tends to be larger for companies from countries that are geographically close to the United States and feature low financial development and poor insider trading protection. For companies based in developed countries, trading volume in the United States is larger if the company is small, volatile, and technology-oriented, while this does not apply to emerging country firms. The domestic turnover rate increases in the cross-listing year and remains higher for firms based in developed markets, but not for emerging market firms. Domestic trading volume actually declines for companies from countries with poor enforcement of insider trading regulation. (JEL G15, G30.) Many companies list their shares not only on their domestic exchange, but also on foreign exchanges-a fact for which several reasons have been offered and explored (see Saudagaran (1988); Karolyi (1998Karolyi ( , 2006Baker, Nofsinger, and Weaver (2002);Pagano, Röell, and Zechner (2002);Doidge, Karolyi, and Stulz (2004);and Sarkissian and Schill (2004), among others). One motive often hypothesized for this decision is that cross-listing facilitates trading by foreign investors. If so, then one would expect cross-listings to be followed by fairly substantial and persistent trading activity in the foreign market.

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Section: Data Descriptionmentioning

confidence: 99%

Where Is the Market? Evidence from Cross-Listings in the United States

Halling¹,

Pagano²,

Randl³

et al. 2007

Rev. Financ. Stud.

116

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“…Kusnadi (2015) concludes that managers engage in projects that are riskier when more effective corporate governance is in place, and potentially improves shareholder value. Budsaratragoon et al (2012) investigate whether the requirement to report insider trades is effective in an emerging market such as Thailand, an issue highlighted in prior work such as Bhattacharya and Daouk (2002) and Gilbert and Tourani-Rad (2008). That is, the enactment of regulation will have negligible effects on the trading by insiders if surveillance mechanisms are not in place or if regulation is not enforced.…”

Section: Restrictions On Trading By Insidersmentioning

confidence: 99%

“…A seminal paper in the area by Bhattacharya and Daouk (2002) examines the enforcement of insider trading laws in 103 countries and how enforcement affects the cost of equity in a country.…”

Section: Restrictions On Trading By Insidersmentioning

confidence: 99%

A review of research on regulation changes in the Asia‐Pacific region

Chang

Jackson

Wee

2017

Accounting & Finance

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In this study, we review the financial research on regulation in the Asia-Pacific region. We do this by analysing six leading regional accounting and finance journals -Abacus, Accounting & Finance, Australian Accounting Review, Australian Journal of Management, International Review of Finance and the Pacific-Basin Finance Journal. We identify five main themes of regulation research relating to: (i) banking and financial institutions, (ii) markets and trading, (iii) corporate governance, (iv) disclosure and (v) accounting standard setting. Our paper synthesises the regional literature in these areas and provide some suggestions for future directions.

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“…Perotti and van Oijen (2001) have also reported that political instability often results in lower stock returns. A second way in which institutional and political factors can affect financial flows is by raising monitoring costs and the frequency of insider and other unfair trading practices (Bhattacharya and Daouk, 2002). Conversely, Papaioannou (2004) has pointed out that a high-quality legal system minimizes monitoring costs while bureaucratic and judicial efficiency alleviates agency costs by settling disputes arising from contract incompleteness.…”

Section: Literature Surveymentioning

confidence: 99%

Determinants of International Bank Lending from the Developed World to East Asia

Siregar¹,

Choy²

2009

IMF Staff Pap

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Abstract:The reversal of capital flows from the banking sector, rather than portfolio equity investment, has long been considered a main reason for the severity of the East Asian financial crisis of the late 1990s. This study analyzes the factors behind the boom and bust of bank lending, focusing on loans from private banks in seven OECD countries to nine East Asian economies during the 1990-2004 period. Our findings suggest that political instability and weaknesses in the legal, judicial, and bureaucratic systems help explain the continued stagnation in lending after the financial crisis. Thus, institutional reforms are critical for East Asia to successfully compete for international bank financing. JEL Classification Numbers: C23, F11, F34, G21, O53Keywords: Foreign Bank Loans; East Asia; Gravity Model; Trade Intensity; Financial Risk; Law and Order; Bureaucratic Quality 2 For most developing economies in East Asia, foreign borrowing from the developed world has provided much-needed capital to finance rapid economic growth, especially during the 1980s and 1990s. 1 Not surprisingly, the sudden reversal of capital flows from the banking sector was a main reason for the severity of the East Asian financial crisis of the late 1990s.Accompanying the collapse of economic growth in major East Asian countries was a sharp decline in loans from OECD-based commercial banks, in particular loans from Japanese institutions. The hardest hit economies, namely, Indonesia, Malaysia, the Philippines, Thailand, and South Korea, which had experienced net private inflows averaging around US$160 billion per annum in 1995 and 1996 (of which about half were short-term commercial bank loans), saw total foreign liabilities drop by around 45 percent in 1998, as international banks were unwilling to roll over existing loans. This paper attempts to examine some of the factors that contributed to the boom and bust in bank lending to East Asian countries between 1990 and 2004. Little work has been done on the determinants of international bank lending to these countries during the pre-and post-1997 financial crisis periods. 2 Instead, research so far has focused on the cross-border 1 The causal effect of the banking sector's liquidity on economic growth has been well studied (Levine, 2005). 2 A few papers such as Jeanneau and Micu (2002), Kawai and Liu (2002), Rose and Spiegel (2004), Papaioannou (2004), and Aviat and Courdacier (2007) looked at international bank lending to emerging market economies as a whole (grouping emerging markets in East Asia with those in Latin America and Africa). (e) Did the quality of the bureaucracy in the borrowing country matter?The paper proceeds as follows. Section I presents a literature survey and highlights various stylized facts about the pattern of international bank lending to East Asia. Section II considers different specifications of a gravity model for asset flows. Section III describes the data and estimation methods. Section IV presents the key empirical findings for the whole sample of OECD an...

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The World Price of Insider Trading

Cited by 1,022 publications

References 32 publications

Where Is the Market? Evidence from Cross-Listings in the United States

Where Is the Market? Evidence from Cross-Listings in the United States

A review of research on regulation changes in the Asia‐Pacific region

Determinants of International Bank Lending from the Developed World to East Asia

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