Profitability of insider trading in Finnish stock market
Khan, Muhammad (2019-06-18)
Khan, Muhammad
M. Khan
18.06.2019
© 2019 Muhammad Khan. Tämä Kohde on tekijänoikeuden ja/tai lähioikeuksien suojaama. Voit käyttää Kohdetta käyttöösi sovellettavan tekijänoikeutta ja lähioikeuksia koskevan lainsäädännön sallimilla tavoilla. Muunlaista käyttöä varten tarvitset oikeudenhaltijoiden luvan.
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:oulu-201906202591
https://urn.fi/URN:NBN:fi:oulu-201906202591
Tiivistelmä
The insider trading is one of the controversial phenomena in the financial world. The aims of the study is to analysis the profitability of insider trading in Finland, also to investigate the association of insider determinants with abnormal returns for purchase and sales transactions. The motivation for this study is the lack of research related to insider trading on Finnish stocks. The main parts of insider trading purchase and sales transactions are investigated and analysis, that insider purchases and sales transactions are related to abnormal returns. In addition, the insider determinants (insider position, firm size, transaction size, book to market ratio, and price to earnings ratio) are also analysed and investigated the roles of it with insider profitability. In order to fulfil the objectives, the daily insider transactions data of 135 publicly listed companies in the Finnish stock market was investigated from 01-07-2005 to 31-12-2014.
The study applied the market adjusted (stocks) returns model, along with univariate, correlation analysis and linear regression to determine the relation of insider traders and abnormal returns. Interestingly, the results found no such relationship of insider trading and abnormal returns. Insiders of high book to market firms are the only who are gaining extra profits (abnormal returns). The overall concluding remarks for this study is, in Finland the insider traders are not generating abnormal returns for both purchases and sales transactions.
The study applied the market adjusted (stocks) returns model, along with univariate, correlation analysis and linear regression to determine the relation of insider traders and abnormal returns. Interestingly, the results found no such relationship of insider trading and abnormal returns. Insiders of high book to market firms are the only who are gaining extra profits (abnormal returns). The overall concluding remarks for this study is, in Finland the insider traders are not generating abnormal returns for both purchases and sales transactions.
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