Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108177
Authors: 
Cziraki, Peter
de Goeij, Peter
Renneboog, Luc
Year of Publication: 
2010
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2010/6
Abstract: 
We investigate patterns of abnormal stock performance around insider trades and option exercises on the Dutch market. Listed firms in the Netherlands have a long tradition of employing many anti-shareholder mechanisms limiting shareholders rights. Our results imply that insider transactions are more profitable at firms where shareholder rights are not restricted by antishareholder mechanisms. This finding goes against the monitoring hypothesis which states that more shareholder orientation and stronger blockholders would reduce the gains from insider trading. We show robust support for the substitution hypothesis as insiders of firms which effectively curtail shareholder rights enjoy valuable private benefits of control in lieu of engaging in insider trading to exploit their position.
Subjects: 
insider trading
management stock options
timing by insiders
corporate governance
antishareholder mechanisms
anti-takeover mechanisms
JEL: 
G14
G34
M52
ISBN: 
978-963-9796-93-5
Document Type: 
Working Paper

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