Strategic insider trading and its consequences for outsiders: Evidence from the eighteenth century

• 成果类型: Article
• 署名作者: Cosemans, Mathijs; Frehen, Rik
• 署名单位: Erasmus University Rotterdam; Erasmus University Rotterdam - Excl Erasmus MC; Tilburg University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103974
• 发表日期: 2025
• 关键词: Insider trading; Financial history; asymmetric information

摘要

This paper uses hand-collected historical data to provide empirical evidence on the strategic trading behavior of insiders and its consequences for outsiders. Specifically, we collect all equity trades of all insiders and outsiders in an era without legal restrictions on insider trading and a market where trading is non-anonymous. We find that access to private information creates a significant gap between the post-trade returns of insiders and outsiders. Consistent with theory, insiders capitalize on their information advantage by hiding their identity and timing their trades. Both experienced and inexperienced outsiders face expected losses due to this strategic insider trading.