Disaster response: The COVID-19 pandemic and insider trading around the world

This paper investigates how corporate insiders respond to the initial COVID-19 outbreaks. Using comprehensive insider transaction data from 25 countries, we document a consistent pattern of insider selling during the month after the first COVID-19 case is confirmed in a given country. Insider sellin...

Full description

Saved in:
Bibliographic Details
Published in:Global finance journal 2023-05, Vol.56, p.100814, Article 100814
Main Authors: Hoang, Khanh, Nguyen, Cuong, Nguyen, Harvey, Vo, Lai Van
Format: Article
Language:English
Subjects:
COVID-19 pandemic
Crisis management
Health crises
Insider trading
Investor trust
Pandemic responses
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper investigates how corporate insiders respond to the initial COVID-19 outbreaks. Using comprehensive insider transaction data from 25 countries, we document a consistent pattern of insider selling during the month after the first COVID-19 case is confirmed in a given country. Insider selling during these disease outbreaks is less pronounced in countries with higher information disclosure requirements, higher public enforcement index, a more efficient judiciary system, and stronger investor protection. Furthermore, cultural differences and the stringency levels of government responses to the COVID-19 outbreaks help moderate insider panic selling when health disasters strike. The findings suggest that a transparent, reliable business system contributes to rebuilding investor trust and corporate resilience during crises.
ISSN:1044-0283
1873-5665
1873-5665
1044-0283
DOI:10.1016/j.gfj.2023.100814