Industry familiarity and trading: Evidence from the personal portfolios of industry insiders

• 成果类型: Article
• 署名作者: Ben-David, Itzhak; Birru, Justin; Rossi, Andrea
• 署名单位: University System of Ohio; Ohio State University; National Bureau of Economic Research; University of Arizona
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.08.007
• 发表日期: 2019
• 页码: 49-75
• 关键词: Retail trading; INSIDERS; Officers and directors; Investor experience

摘要

We study whether industry familiarity is an advantage in stock trading by exploring the trading patterns of industry insiders in their own personal portfolios. To do so, we identify accounts of industry insiders in a large data set provided by a retail discount broker. We find that insiders trade firms from their own industry more frequently. Furthermore, they earn abnormal returns exclusively when trading own-industry stocks, especially obscure stocks (small, low analyst coverage, high volatility). In a battery of tests, we find no evidence of the use of private information. The results are most consistent with the interpretation that industry familiarity is an advantage in stock trading. (C) 2018 Elsevier B.V. All rights reserved.