An empirical analysis of legal insider trading in the Netherlands

Arbeitspapier

In this paper, we employ a registry of legal insider trading for Dutch listed firms to investigate the information content of trades by corporate insiders. Using a standard event-study methodology, we examine short-term stock price behavior around trades. We find that purchases are followed by economically large abnormal returns. This result is strongest for purchases by top executives and for small market capitalization firms, which is consistent with the hypothesis that legal insider trading is an important channel through which information flows to the market. We analyze also the impact of the implementation of the Market Abuse Directive (European Union Directive 2003/6/EC), which strengthens the existing regulation in the Netherlands. We show that the new regulation reduced the information content of sales by top executives.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2687

Classification and Topics

• Classification: Wirtschaft ; Information and Market Efficiency; Event Studies; Insider Trading ; Financial Institutions and Services: Government Policy and Regulation ; Business and Securities Law
• Subject: insider trading ; financial market regulation ; Insiderhandel ; Führungskräfte ; Informationswert ; Wertpapierhandel ; Börsenkurs ; Insiderrecht ; EU-Wirtschaftsrecht ; Niederlande

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Degryse, Hans ; de Jong , Frank ; Lefebvre, Jérémie
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/30456
• Last update: 10.03.2025, 11:41 AM CET