| Summary: | 碩士 === 國立臺北大學 === 企業管理學系 === 99 === This study investigates the relationship between insider trading and future stock performance, and explores the factors associated with multiple motives of insider trading. The findings show that insiders can profit from trading shares when the stock valuation errors of general investors are greater. In addition, insiders tend to practice insiders selling for non-information motives like diversification and liquidity need motives, but have negative abnormal stock returns.
Compared with the past methodology, this study not only measure the stock valuation errors using the pricing deviation, but also control for information and non-information trading variables. This study infers that the positive stock performance of information motivated trading maybe offset by the negative stock performance of non-information motivated trading, which possibly causes the inconclusive conclusion of insiders’ information advantage on the current literatures. Furthermore, the long-term positive stock performances of the contrarian buying strategy reflect the insiders’ information advantage.
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