The impact of personal attributes on corporate insider trading

David Hillier; Adriana Korczak; Piotr Korczak

doi:10.1016/j.jcorpfin.2014.12.003

The impact of personal attributes on corporate insider trading

David Hillier, Adriana Korczak, Piotr Korczak

Strathclyde Business School

Research output: Contribution to journal › Article

13 Citations (Scopus)

Abstract

We analyze the importance of personal attributes in explaining the performance of reported share transactions by corporate insiders. While prior literature has focused on observable firm and trade characteristics, little effort has been made to understand how individual attributes, such as skills, abilities, or personality, impact upon post-trade abnormal returns. We document that personal attributes explain up to a third of the variability in insider trading performance and dominate unobservable and observable firm and trade characteristics by a sizeable margin. Personal attributes are correlated with the insider’s year of birth, education and gender, and matter more in companies with greater information asymmetry and when outsiders are inattentive to public information. We shed also new light on the significance of executive hierarchy and regulations in explaining insider trading performance and highlight the importance of controlling for individual fixed effects in insider trading research to avoid omitted variable bias in estimated regression coefficients.

Language	English
Pages	150-167
Number of pages	18
Journal	Journal of Corporate Finance
Volume	30
Early online date	18 Dec 2014
DOIs	10.1016/j.jcorpfin.2014.12.003
Publication status	Published - Feb 2015

Fingerprint

Insider trading

Insider

Coefficients

Education

Abnormal returns

Omitted variable bias

Information asymmetry

Margin

Public information

Fixed effects

Outsider

Keywords

insider training
abnormal returns
fixed effects

Cite this

Hillier, D., Korczak, A., & Korczak, P. (2015). The impact of personal attributes on corporate insider trading. Journal of Corporate Finance, 30, 150-167. https://doi.org/10.1016/j.jcorpfin.2014.12.003

Hillier, David ; Korczak, Adriana ; Korczak, Piotr. / The impact of personal attributes on corporate insider trading. In: Journal of Corporate Finance. 2015 ; Vol. 30. pp. 150-167.

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Hillier, D, Korczak, A & Korczak, P 2015, 'The impact of personal attributes on corporate insider trading' Journal of Corporate Finance, vol. 30, pp. 150-167. https://doi.org/10.1016/j.jcorpfin.2014.12.003

The impact of personal attributes on corporate insider trading. / Hillier, David; Korczak, Adriana; Korczak, Piotr.

In: Journal of Corporate Finance, Vol. 30, 02.2015, p. 150-167.

Research output: Contribution to journal › Article

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