Journal ArticleDOI
Insider Trading and the Dissemination of Firms' Forecast Information
TLDR
In this article, the authors investigated the link between observed insider information and insider trading and also showed that insiders do indeed have superior information and use that information in trading in their firms' securities.Abstract:
It is generally supposed that corporate insiders have access to information superior to that of outsiders. Empirical work on insider trading by Jaffe (1974) and Finnerty (1976a, 1976b) has found that insiders do earn higher returns on their shareholdings than outsiders, on average. Further, insiders in different managerial positions appear to earn differential abnormal returns (Baesel and Stein 1979).1 Investors subscribe to services which summarize insider trading activity2 and act on the information released in the SEC's Official Summary of Insider Trading (Jaffe 1974). This evidence suggests that insiders do indeed have superior information and use that information in trading in their firms' securities. This paper investigates more directly the link between observed insider information and insider trading and also the link between insider trading and information-dissemination activities. The tests reported here examine the security trading of corporate insiders around the time they make public announcements about theirread more
Citations
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Journal ArticleDOI
Using daily stock returns: The case of event studies
TL;DR: In this paper, the authors examine properties of daily stock returns and how the particular characteristics of these data affect event study methodologies and show that recognition of autocorrelation in daily excess returns and changes in their variance conditional on an event can sometimes be advantageous.
Journal ArticleDOI
Event-study methodology under conditions of event-induced variance
TL;DR: It is demonstrated that a simple adjustment to the cross-sectional techniques produces appropriate rejection rates when the null is true and equally powerful tests when it is false.
Journal ArticleDOI
CEO stock option awards and the timing of corporate voluntary disclosures
David Aboody,Ron Kasznik +1 more
TL;DR: The authors investigated whether CEOs manage the timing of their voluntary disclosures around stock option awards and found that CEOs make opportunistic voluntary disclosure decisions that maximize their stock option compensation, and provided more direct evidence based on management earnings forecasts issued prior to award dates.
Journal ArticleDOI
Equity incentives and earnings management
Qiang Cheng,Terry D. Warfield +1 more
TL;DR: The authors examined the link between managers' equity incentives and earnings management and found that managers with high equity incentives are more likely to sell shares in the future and this motivates these managers to engage in earnings management to increase the value of the shares to be sold.
Journal ArticleDOI
Equity Incentives and Earnings Management
Qiang Cheng,Terry D. Warfield +1 more
TL;DR: This paper examined the link between managers' equity incentives arising from stock-based compensation and stock ownership and earnings management and found that managers with high equity incentives are more likely to sell shares in the future and this motivates these managers to engage in earnings management.
References
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Journal ArticleDOI
An intertemporal capital asset pricing model
TL;DR: In this article, an intertemporal model for the capital market is deduced from portfolio selection behavior by an arbitrary number of investors who aot so as to maximize the expected utility of lifetime consumption and who can trade continuously in time.
Journal ArticleDOI
Estimating betas from nonsynchronous data
Myron S. Scholes,Joseph Williams +1 more
TL;DR: In this article, the observed market model and associated ordinary least squares estimators are developed in detail, and computationally convenient, consistent estimators for parameters of the market model are calculated and then applied to daily returns of securities listed in the NYSE and ASE.
Journal ArticleDOI
Corporate forecasts of earnings per share and stock-price behavior - empirical tests
TL;DR: In this paper, the authors examined the common stock price behavior which accompanied the voluntary disclosure of 336 forecasts of annual earnings per share during the years 1963-67 and found that these forecast disclosures were accompanied by significant price adjustments, from which the inference may be drawn that either the data presented in a management forecast, the act of voluntary disclosure, or both, convey information to investors.
Journal ArticleDOI
Special Information and Insider Trading
TL;DR: In this article, the average return on these securities is 10 percent above the return on the stock market as a whole in the 7 months following the individual months of intensive insider buying.
Book ChapterDOI
The Private and Social Value of Information and the Reward to Inventive Activity
TL;DR: In this paper, the authors discuss the private and social value of information along with the reward of inventive activity, and argue that there tends to be private underinvestment in inventive activity mainly because of the imperfect appropriability of knowledge.