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Profitability of insider trading in Europe: A performance evaluation approach

Lookup NU author(s): Professor Bartosz GebkaORCiD

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Abstract

800x600 We use the largest cross-country sample of reported share transactions by corporate insiders to date to establish that, generally, insiders in Europe, and particularly in continental Europe, do not make abnormal trading profits, in contrast to the earlier evidence from the U.S. The results hold across subsamples of firms with different characteristics. Furthermore, introduction of the European Union Market Abuse Directive (MAD) had a mixed impact on the frequency and volume of insider trading across countries but did not affect profits of insider-mimicking portfolios. We build on the heterogeneity of our sample countries to show that several country-level legal, economic and cultural factors are linked with the level of insider profits which can explain why the profitability of insider trading differs starkly across countries. Normal 0 false false false EN-GB X-NONE X-NONE MicrosoftInternetExplorer4

Publication metadata

Author(s): Gebka B, Korczak A, Korczak P, Traczykowski J

Publication type: Article

Publication status: Published

Journal: Journal of Empirical Finance

Year: 2017

Volume: 44

Pages: 66-90

Print publication date: 01/12/2017

Online publication date: 16/08/2017

Acceptance date: 02/08/2017

Date deposited: 29/08/2017

ISSN (print): 0927-5398

Publisher: Elsevier

URL: https://doi.org/10.1016/j.jempfin.2017.08.001

DOI: 10.1016/j.jempfin.2017.08.001

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