Corporate governance and insider trading: evidence from Malaysia

The collapse of prominent companies coupled with the increasing number of lawsuits against the directors of the companies for wrongdoing has raised concerns with insider trading activities. Insider trading does cause significant market reaction, whereby the insiders are able to earn significant cu...

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Main Authors:	Ahmad Kamal, Siti Aisyah, Hasnan, Suhaily, Mohd Nasarudin, Ahmad Fawwaz
Format:	Article
Language:	English
Published:	Academic Research Publishing Group 2018
Subjects:	HG4501 Stocks, investment, speculation
Online Access:	http://irep.iium.edu.my/69483/ http://irep.iium.edu.my/69483/ http://irep.iium.edu.my/69483/1/69483_Corporate%20governance%20and%20insider%20trading_article.pdf

id	iium-69483
recordtype	eprints
spelling	iium-694832019-02-15T07:49:49Z http://irep.iium.edu.my/69483/ Corporate governance and insider trading: evidence from Malaysia Ahmad Kamal, Siti Aisyah Hasnan, Suhaily Mohd Nasarudin, Ahmad Fawwaz HG4501 Stocks, investment, speculation The collapse of prominent companies coupled with the increasing number of lawsuits against the directors of the companies for wrongdoing has raised concerns with insider trading activities. Insider trading does cause significant market reaction, whereby the insiders are able to earn significant cumulative abnormal returns for both purchases and sales. However, studies on the factors influencing insider trading are relatively scarce. This study aims to examine the factors that influence insider trading activities. Specifically, this study examines the relationship between four corporate governance factors, namely, board independence, board size, executive compensation and ownership concentration and insider trading activities in public listed companies in Malaysia. This study evinces that board size and executive compensation significantly influence insider purchases. On the other hand, significant market reaction caused by insider sales may be explained by other factors. Therefore, future studies could be carried out on other factors that may influence opportunistic insider sales. This study also found evidence against the semistrong form Efficient Market Hypothesis theory that suggests insiders cannot earn abnormal returns in a semi-strong efficient market using public information Academic Research Publishing Group 2018 Article PeerReviewed application/pdf en http://irep.iium.edu.my/69483/1/69483_Corporate%20governance%20and%20insider%20trading_article.pdf Ahmad Kamal, Siti Aisyah and Hasnan, Suhaily and Mohd Nasarudin, Ahmad Fawwaz (2018) Corporate governance and insider trading: evidence from Malaysia. Journal of Social Sciences Research, Special Issue 2. pp. 31-39. ISSN 2413-6670 E-ISSN 2411-9458 https://arpgweb.com/journal/7/special_issue/11-2018/2/4
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	HG4501 Stocks, investment, speculation
spellingShingle	HG4501 Stocks, investment, speculation Ahmad Kamal, Siti Aisyah Hasnan, Suhaily Mohd Nasarudin, Ahmad Fawwaz Corporate governance and insider trading: evidence from Malaysia
description	The collapse of prominent companies coupled with the increasing number of lawsuits against the directors of the companies for wrongdoing has raised concerns with insider trading activities. Insider trading does cause significant market reaction, whereby the insiders are able to earn significant cumulative abnormal returns for both purchases and sales. However, studies on the factors influencing insider trading are relatively scarce. This study aims to examine the factors that influence insider trading activities. Specifically, this study examines the relationship between four corporate governance factors, namely, board independence, board size, executive compensation and ownership concentration and insider trading activities in public listed companies in Malaysia. This study evinces that board size and executive compensation significantly influence insider purchases. On the other hand, significant market reaction caused by insider sales may be explained by other factors. Therefore, future studies could be carried out on other factors that may influence opportunistic insider sales. This study also found evidence against the semistrong form Efficient Market Hypothesis theory that suggests insiders cannot earn abnormal returns in a semi-strong efficient market using public information
format	Article
author	Ahmad Kamal, Siti Aisyah Hasnan, Suhaily Mohd Nasarudin, Ahmad Fawwaz
author_facet	Ahmad Kamal, Siti Aisyah Hasnan, Suhaily Mohd Nasarudin, Ahmad Fawwaz
author_sort	Ahmad Kamal, Siti Aisyah
title	Corporate governance and insider trading: evidence from Malaysia
title_short	Corporate governance and insider trading: evidence from Malaysia
title_full	Corporate governance and insider trading: evidence from Malaysia
title_fullStr	Corporate governance and insider trading: evidence from Malaysia
title_full_unstemmed	Corporate governance and insider trading: evidence from Malaysia
title_sort	corporate governance and insider trading: evidence from malaysia
publisher	Academic Research Publishing Group
publishDate	2018
url	http://irep.iium.edu.my/69483/ http://irep.iium.edu.my/69483/ http://irep.iium.edu.my/69483/1/69483_Corporate%20governance%20and%20insider%20trading_article.pdf
first_indexed	2023-09-18T21:38:38Z
last_indexed	2023-09-18T21:38:38Z
_version_	1777412990407016448

Corporate governance and insider trading: evidence from Malaysia

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