search query: @author Masson, R. T. / total: 11
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| Author: | Masson, R. T. Madhavan, A. |
| Title: | Insider trading and the value of the firm |
| Journal: | Journal of Industrial Economics
1991 : JUN, VOL. 39:4, p. 333-353 |
| Index terms: | INSIDER TRADING ASSET VALUATION STOCK OWNERSHIP EXECUTIVES CORPORATE FINANCE |
| Language: | eng |
| Abstract: | The results of previous studies of insider trading are summarized. The informational efficiency of securities markets is assessed. It is examined empirically whether insider trading by a firm's top executives raises or lowers firm value. A distinction is made between executive stock ownership and trading. In a stylized theoretical model it is shown that even if insider trading increases firm value, insider trading is deterious at the margin. The results support the hypothesis that active use of insider information in stock trading by executives lowers firm value. However, greater stock ownership by executives raises firm value. Simultaneity is dealt with by using a two-part testing procedure. |
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