Corporate governance and insider trading
Name
315871878-MIT.pdf
Description
Full printable version
Size
4.71 MB
Format
Adobe PDF
Checksum (MD5)
b7f4cf1585e70a4ea3d0d4192114e962
Author(s)
Rozanov, Konstantin A
Advisor(s)
S.P. Kothari.
Date Issued
2008
Publisher
Massachusetts Institute of Technology
Abstract
I investigate the relation between corporate governance and insider trading by corporate executives. Despite the general view that trade on non-public information adversely affects capital market participants, the impact of corporate governance on such trading remains relatively unexplored in prior research. I propose an empirical measure that relies on a predicted pattern in stock returns to identify transactions that are more likely to be based on private information and provide evidence to validate the construct. Using this measure, I find that good corporate governance, identified through board and ownership characteristics that have been linked to more effective monitoring of management in prior research, is negatively related to opportunistic insider trading. In supplementary analysis, I provide evidence on the robustness of this relation to an alternative hypothesis and to potential endogeneity. Overall, I conclude that good corporate governance helps to attenuate opportunistic insider trading.
Description
Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, 2008.
Includes bibliographical references (p. 58-64).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
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