The Information Content of Indirect Insider Trading: Empirical Evidence from Vietnam Security Market

Journal of Applied Finance & Banking Pub Date : 2022-03-10 DOI:10.47260/jafb/1232

Han‐Ching Huang, William Indajang

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Abstract

Abstract In this paper, we discuss the relationship among indirect insider trading, opportunistic trading and investment horizon in Vietnam security market. Goldie, Jiang, Koch and Wintoki [10] find that in order to camouflage opportunistic trading, insiders trade through the accounts of family members, trusts, and foundations, known as indirect insider trading. According to Cohen, Malloy and Pomorski [5], opportunistic trading are strong predictors of future return. Akbas, Jiang, and Koch [1] document that the performance of short-horizon insiders to forecast future stock prices are better than that of long-horizon insiders since SH insiders are more likely to be unexpected, on average, when compared with the typical expected trade of LH insiders. Empirical results show that the impact of opportunistic trades in indirect insider trading on future return is stronger than that in direct insider trading. In indirect insider trading, the impact of opportunistic trades on future return is still stronger than that of routine trades. Moreover, we find that the impact of short-horizon insiders in indirect insider trading on future return is stronger than that in direct insider trading. In indirect insider trading, the impact of short-horizon insiders on future return is still stronger than that of long-horizon insiders. JEL classification numbers: G11, G14. Keywords: Insider trading, Indirect insider trading, Opportunistic trading, Investment horizon.

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间接内幕交易的信息含量:来自越南证券市场的经验证据

摘要本文讨论了越南证券市场的间接内幕交易、机会交易和投资视野之间的关系。Goldie、Jiang、Koch和Wintoki[10]发现，为了掩饰机会性交易，内幕人通过家庭成员、信托和基金会的账户进行交易，被称为间接内幕交易。根据Cohen、Malloy和Pomorski[5]的观点，机会主义交易是预测未来收益的有力指标。Akbas、Jiang和Koch[1]研究表明，短线内部人预测未来股价的表现优于长线内部人，因为平均而言，与LH内部人的典型预期交易相比，SH内部人更有可能出现意外。实证结果表明，间接内幕交易中的机会主义交易对未来收益的影响强于直接内幕交易。在间接内幕交易中，机会主义交易对未来收益的影响仍然强于常规交易。此外，我们发现间接内幕交易中的短期内幕人对未来收益的影响强于直接内幕交易。在间接内幕交易中，短线内幕人对未来收益的影响仍然强于长线内幕人。JEL分类号:G11、G14。关键词:内幕交易，间接内幕交易，机会交易，投资视野

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Journal of Applied Finance & Banking

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