DOI
https://doi.org/10.25772/W7GD-N956
Author ORCID Identifier
https://orcid.org/0000-0002-5243-5810
Defense Date
2024
Document Type
Dissertation
Degree Name
Doctor of Philosophy
Department
Business
First Advisor
Dr. Myung Park
Second Advisor
Dr. Bowe Hansen
Third Advisor
Dr. Jamie Zhou
Fourth Advisor
Dr. Seong Byun
Abstract
I examine the relationship between common institutional ownership (CIO) and opportunistic insider trading. This relationship is important given the tremendous increase in CIO over the past 20 years and the detrimental effect of opportunistic insider trading on shareholder value. I hypothesize that CIO is negatively associated with opportunistic insider trading. Consistent with this view, I find that the presence of CIO significantly reduces opportunistic insider trading value, volume, and insider frequency. Additionally, I find that CIO by active institutions has a stronger negative association with opportunistic insider trading than CIO by passive institutions. Specifically, my results show that the presence of CIO from active institutions significantly reduces the dollar value, trading volume, and frequency of opportunistic insider trading. Furthermore, I find that this inverse relation is more evident for opportunistic insider sales than opportunistic insider purchases. Overall, my findings suggest that CIO plays an important role in insider trading decisions by enhancing monitoring effectiveness and efficiency, and by reducing commonly owned firms’ information asymmetry.
Rights
© The Author
Is Part Of
VCU University Archives
Is Part Of
VCU Theses and Dissertations
Date of Submission
5-6-2024