Innovation and Insider Trading
Source of Publication
SSRN Electronic Journal
The study finds that insiders' purchases in large firms precede the patent applications for innovations. US publicly held large firms increase their innovation quality by 25% subsequent to the share purchase of top insiders, as measured by non-self citations received per patent applied. The average cumulative abnormal returns of insiders on their purchases prior to the important patent applications are economically large and significant especially in the long run. The use of private information by insiders seems to be less prevalent in firms with better corporate governance. Firm innovation quality also deteriorates after insiders sell their share in the company
Bostan, Ibrahim, "Innovation and Insider Trading" (2016). All Works. 2020.
Indexed in Scopus
Open Access Type
Green: A manuscript of this publication is openly available in a repository