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Essays on Insider Trading and Initial Public Offerings
Stockholms universitet, Samhällsvetenskapliga fakulteten, Företagsekonomiska institutionen.
2018 (Engelska)Doktorsavhandling, sammanläggning (Övrigt vetenskapligt)
Abstract [en]

   This thesis consists of four self-standing articles on insider trading, initial public offerings and delisting of corporate firms.

   The first paper in this thesis investigates whether insiders, in an asymmetric information environment, manipulate the earnings of a firm to influence investors’ perceptions of firm value in order to benefit from their trades. The main finding of this paper is a positive association between accrual-based earnings management and sell-dominated insider trading given the existence of asymmetric information. We find a leading role for information asymmetry and its interaction effect on the relationship between insider trading and discretionary accrual proxies.

   The second paper examines the opportunistic trading behavior of core insiders compared with non-core ones. We document that although both core and non-core insiders are equally motivated by contrarian beliefs, their motivational difference in opportunistic trading is primarily connected to preferential and favored access to superior private information.

   The third paper investigates the role underwriters play in initial public offerings on Mondays. Our evidence suggests that underwriters are reluctant to take firms public on Mondays, as they face uncertainty about pricing the IPOs due to the lack of information and a greater risk of not being able to sell stocks at the offer price, thus losing money. However, they bring IPOs on Mondays, as they are sufficiently underpriced to minimize their risks.

   The fourth paper investigates the roles of institutional investors and insiders in the delisting of firms – an important corporate event. Our analysis reveals that institutional holdings have a negative effect on a firm’s probability of being delisted within five years after the IPO. We also find that insider purchases have a negative effect and insider sales have a positive effect on the probability of delisting. Our result further shows that the probability of delisting decreases if firms’ insiders increase their holdings.

Ort, förlag, år, upplaga, sidor
Stockholm: Stockholm Business School, Stockholm University , 2018. , s. 15
Nyckelord [en]
Insider trading, Discretionary accruals, Information asymmetry, Opportunistic trades, Contrarian beliefs, Superior information, Monday IPOs, Underwriters, Institutional holdings, Delisting, Distance to default
Nationell ämneskategori
Företagsekonomi
Forskningsämne
företagsekonomi
Identifikatorer
URN: urn:nbn:se:su:diva-160942ISBN: 978-91-7797-454-3 (tryckt)ISBN: 978-91-7797-455-0 (digital)OAI: oai:DiVA.org:su-160942DiVA, id: diva2:1255413
Disputation
2018-11-29, Gröjersalen, hus 3, Kräftriket, Roslagsvägen 101, Stockholm, 13:00 (Engelska)
Opponent
Handledare
Anmärkning

At the time of the doctoral defense, the following papers were unpublished and had a status as follows: Paper 2: Manuscript. Paper 3: Manuscript. Paper 4: Manuscript.

Tillgänglig från: 2018-11-06 Skapad: 2018-10-12 Senast uppdaterad: 2022-02-26Bibliografiskt granskad
Delarbeten
1. Insider-trading, discretionary accruals and information asymmetry
Öppna denna publikation i ny flik eller fönster >>Insider-trading, discretionary accruals and information asymmetry
2018 (Engelska)Ingår i: The British Accounting Review, ISSN 0890-8389, E-ISSN 1095-8347, Vol. 50, nr 4, s. 341-363Artikel i tidskrift (Refereegranskat) Published
Abstract [en]

Using US data for the period from 2004 to 2012 and alternative discretionary accruals measures, we examine whether insiders manipulate earnings in an asymmetric information environment to profit from their informed trades, and whether the intervening information environment influences the relationship between earnings management and insider trading. We show that insider trading dominated by sell trades has a positive association with discretionary accruals. The incremental effect of information asymmetry as well as the interaction with insider trading is also prevalent in this relation, confirming the moderating effect of asymmetric information. Further, we show that the active involvement of some key insiders in high discretionary accruals is for personal benefit more in growth firms than in value firms. Our results also suggest that earnings management allows for insiders' opportunistic, rather than routine, buy and sell trades. Our findings highlight that regulators should oversee and scrutinise both insider trading and earnings management to mitigate the risk of the opportunistic behaviour of insiders to avoid future corporate scandals.

Nyckelord
Insider trading, Discretionary accruals, Information asymmetry, Major insiders, Opportunistic and routine trading
Nationell ämneskategori
Ekonomi och näringsliv
Forskningsämne
företagsekonomi
Identifikatorer
urn:nbn:se:su:diva-158279 (URN)10.1016/j.bar.2017.08.005 (DOI)000438004600001 ()
Tillgänglig från: 2018-08-01 Skapad: 2018-08-01 Senast uppdaterad: 2022-02-26Bibliografiskt granskad
2. In Search of the Opportunistic Trades of Insiders
Öppna denna publikation i ny flik eller fönster >>In Search of the Opportunistic Trades of Insiders
(Engelska)Manuskript (preprint) (Övrigt vetenskapligt)
Nationell ämneskategori
Företagsekonomi
Forskningsämne
företagsekonomi
Identifikatorer
urn:nbn:se:su:diva-160946 (URN)
Tillgänglig från: 2018-10-12 Skapad: 2018-10-12 Senast uppdaterad: 2022-02-26Bibliografiskt granskad
3. Monday IPOs and Underwriters
Öppna denna publikation i ny flik eller fönster >>Monday IPOs and Underwriters
(Engelska)Manuskript (preprint) (Övrigt vetenskapligt)
Nyckelord
Monday IPOs, Underwriters, Underpricing, Long-run performance
Nationell ämneskategori
Företagsekonomi
Forskningsämne
företagsekonomi
Identifikatorer
urn:nbn:se:su:diva-160948 (URN)
Tillgänglig från: 2018-10-12 Skapad: 2018-10-12 Senast uppdaterad: 2022-02-26Bibliografiskt granskad
4. Institutional Holdings, Insider Trading and Firm Delisting
Öppna denna publikation i ny flik eller fönster >>Institutional Holdings, Insider Trading and Firm Delisting
(Engelska)Manuskript (preprint) (Övrigt vetenskapligt)
Nyckelord
Institutional holdings, Insider trading, Delisting, Distance to default, Hazard
Nationell ämneskategori
Företagsekonomi
Forskningsämne
företagsekonomi
Identifikatorer
urn:nbn:se:su:diva-160950 (URN)
Tillgänglig från: 2018-10-12 Skapad: 2018-10-12 Senast uppdaterad: 2022-02-26Bibliografiskt granskad

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Essays on Insider Trading and Initial Public Offerings(522 kB)366 nedladdningar
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Chowdhury, Abu

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