Why regulate insider trading? Evidence from the first great merger wave (1897-1903)

• 成果类型: Article
• 署名作者: Banerjee, A; Eckard, EW
• 署名单位: University of Colorado System; University of Colorado Denver
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.91.5.1329
• 发表日期: 2001
• 页码: 1329-1349
• 关键词: UNITED-STATES; MARKET; INFORMATION; OWNERSHIP; cost

摘要

We use event-time methodology to study legal insider trading associated with mergers circa 1900. For mergers with prospective disclosures similar to today's, we find substantial value gains at announcement, implying participation by outside shareholders despite the absence of insider constraints. Furthermore, preannouncement stock-price runups, relative to total value gain, are no more than those observed for modern mergers. Insider regulation apparently has produced little benefit for outsiders, with the inside information-pricing function and related gains shifting to external information specialists. Other results suggest market penalties for nondisclosure; i.e., insider trading is less successful in a restricted information environment.