Cross-Border Activities as a Source of Information: Evidence from Insider Trading during the COVID-19 Crisis

Fisher College of Business Working Paper No. 2021-03-020

Charles A. Dice Working Paper No. 2021-20

58 Pages Posted: 17 Dec 2021 Last revised: 27 Feb 2022

See all articles by Leandro Sanz

Leandro Sanz

Ohio State University (OSU) - Department of Finance

Date Written: December 10, 2021

Abstract

Insider trading during the early months of the COVID-19 pandemic provides a unique opportunity to study how corporate insiders benefit from information flows in their network of business contacts. I find that insiders at firms with activities in China sell more shares of their companies than other insiders and do so earlier. Consistent with an information channel, I show that firms with supply-chain relationships and subsidiaries in China, more local assets and employees, and insiders overseeing global operations drive these effects. Insiders' private information seems to have been forward-looking, which allowed them to avoid significant losses during the period.

Keywords: Information networks, insider trading, officers and directors, COVID-19

JEL Classification: D83, D85, F23, G14

Suggested Citation

Sanz, Leandro, Cross-Border Activities as a Source of Information: Evidence from Insider Trading during the COVID-19 Crisis (December 10, 2021). Fisher College of Business Working Paper No. 2021-03-020, Charles A. Dice Working Paper No. 2021-20, Available at SSRN: https://ssrn.com/abstract=3987237 or http://dx.doi.org/10.2139/ssrn.3987237

Leandro Sanz (Contact Author)

Ohio State University (OSU) - Department of Finance ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States

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