The Effect of Financial Information and Corporate Governance on Insider Trading

• Main Authors: Pau-Tan Lin, 林寶堂
• Other Authors: 倪衍森
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/08157083616759904964

碩士 === 淡江大學 === 管理科學學系企業經營碩士在職專班 === 101 === Stock markets are growing fast resulting in share markets expended quickly. In fact,enterprises could raise money by listing in stock exchanges and investors could manage their money by investing stocks in share markets. In other words, stock markets are main channels for fund raising provided by investors for enterprises,which might benefit for both enterprises and investors. However, the drawbacks resulting from insider trading seem existed in stock markets, which often cause the loss even huge losses while market participants invest shares in stock markets. This study investigates whether the insider trading would be affected by the corporate governance and financial statements for the share listing in the Taiwan stock exchanges. We wish that investors would be beneficial for screening stocks by taking the results revealed into accounts. The results show that foreign institutions are inclined to invest heavy-weighted stocks accompanied with profitability, since the stocks with higher foreign holding ratios are often employed for manipulating index futures though trading these heavy-weighted stocks by these institutions. In this study,we disclose that the insider trading is seldom occurred for the firms with higher credit rating and lower directors’ remuneration. In addition, insides trading seem to be often happened for the small-scale stocks. We argue that these firms with higher directors’ ratios, managers holding ratios, higher turnover ratios would be suspect to manipulate prices due to their higher shareholding ratios. Furthermore, we disclose that foreign institutions seem not to prefer holding small-scale stocks. Investors might ponder whether insider trading is easily existed for these shares.