Political Connections and Insider Trading
| Autor: | Renaud Coulomb, Marc Sangnier, Thomas Bourveau |
|---|---|
| Přispěvatelé: | Hong Kong University of Science and Technology (HKUST), University of Melbourne, Groupement de Recherche en Économie Quantitative d'Aix-Marseille (GREQAM), École des hautes études en sciences sociales (EHESS)-Aix Marseille Université (AMU)-École Centrale de Marseille (ECM)-Centre National de la Recherche Scientifique (CNRS), École Centrale de Marseille (ECM)-École des hautes études en sciences sociales (EHESS)-Centre National de la Recherche Scientifique (CNRS)-Aix Marseille Université (AMU), Lai Tong, Charles |
| Jazyk: | angličtina |
| Rok vydání: | 2016 |
| Předmět: |
Value (ethics)
050208 finance political connections Presidential election business.industry Financial market 05 social sciences Accounting White-collar crime Public relations 16. Peace & justice [SHS.ECO]Humanities and Social Sciences/Economics and Finance insider trading Indirect evidence Politics white-collar crime 0502 economics and business Insider trading Business 050207 economics [SHS.ECO] Humanities and Social Sciences/Economics and Finance |
| Popis: | This paper investigates whether political connections affect individuals’ propensity to engage in illegal activities in financial markets. We use the 2007 French presidential election as marker of change in the value of political connections, in a difference-in-differences research design. We examine the behavior of directors of publicly listed companies who are connected to the future president through campaign donations or direct friendships, relative to that of other non-connected directors, before and after the election. We uncover indirect evidence that connected directors do more illegal insider trading after the election. More precisely, we find that purchases by connected directors trigger larger abnormal returns, and that connected directors are more likely not to comply with trading disclosure requirements and to trade closer to major corporate events. |
| Databáze: | OpenAIRE |
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