{"title":"On Brazilian Insider Trading: Determinants and Informational Effects","authors":"Lucas N. C. Vasconcelos, Orleans Silva Martins","doi":"10.1080/10978526.2019.1709073","DOIUrl":null,"url":null,"abstract":"Abstract We investigate the determinants of insider trading and its effects on the levels of stock price informativeness in Brazil. We use corporate insider trading data for companies included in the IBrX-100 index between December 2016 and June 2018. In our standard sample, our findings indicate that insiders tend to trade in high liquidity months, and this behavior hampers the detection of adverse selection. Also, insider trading seems to be irrelevant to efficiency. Our study indicates that greater trading transparency is essential for outsiders to increase market efficiency since trading alone does not provide such a scenario. We suggest caution in the use of low-frequency liquidity measures for adverse selection detection in this market.","PeriodicalId":35384,"journal":{"name":"Latin American Business Review","volume":null,"pages":null},"PeriodicalIF":0.0000,"publicationDate":"2020-01-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/10978526.2019.1709073","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Latin American Business Review","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1080/10978526.2019.1709073","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"Business, Management and Accounting","Score":null,"Total":0}
引用次数: 0
Abstract
Abstract We investigate the determinants of insider trading and its effects on the levels of stock price informativeness in Brazil. We use corporate insider trading data for companies included in the IBrX-100 index between December 2016 and June 2018. In our standard sample, our findings indicate that insiders tend to trade in high liquidity months, and this behavior hampers the detection of adverse selection. Also, insider trading seems to be irrelevant to efficiency. Our study indicates that greater trading transparency is essential for outsiders to increase market efficiency since trading alone does not provide such a scenario. We suggest caution in the use of low-frequency liquidity measures for adverse selection detection in this market.
期刊介绍：
Latin American Business Review is a quarterly, refereed journal which facilitates the exchange of information and new ideas between academics, business practitioners, public policymakers, and those in the international development community. Special features of the journal will keep you current on various teaching, research, and information sources. These activities all focus on the business and economic environment of the diverse and dynamic countries of the Americas.
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