Article
Innovation and Insider Trading
SSRN Electronic Journal
Document Type
Article
Publication Date
1-1-2016
Abstract
The study finds that insiders' purchases in large firms precede the patent applications for innovations. US publicly held large firms increase their innovation quality by 25% subsequent to the share purchase of top insiders, as measured by non-self citations received per patent applied. The average cumulative abnormal returns of insiders on their purchases prior to the important patent applications are economically large and significant especially in the long run. The use of private information by insiders seems to be less prevalent in firms with better corporate governance. Firm innovation quality also deteriorates after insiders sell their share in the company
DOI Link
10.2139/ssrn.2713118
Publisher
Elsevier BV
Disciplines
Indexed in Scopus
No
Open Access
Yes
Open Access Type
Green: A manuscript of this publication is openly available in a repository
https://doi.org/10.2139/ssrn.2713118
Citation Information
Ibrahim Bostan. "Innovation and Insider Trading" SSRN Electronic Journal (2016) ISSN: <a href="https://v2.sherpa.ac.uk/id/publication/issn/1556-5068" target="_blank">1556-5068</a> Available at: http://works.bepress.com/ibrahim-bostan/3/