Insider Trading Impact On Company Performance, Empirical Research

With the samples of stocks which has experienced insider trading in Chinese securitymarket, this passage discusses many aspects of our nation securities administration,including precautionary supervising system and sanction system. Moreover, this study isbased on the definition of insider trading concept, the value criterion which used to restrainthe inner trading behavior by law, and referring to the thoroughly analysis on status ofChinese modern legislation.Then, the article has summarized main research method about insider tradingincluding the event studies law, PPD method, LMSW method, Logistic analysis method,decision-making tree model.From 1992 till end of June, 2005, Securities Regulatory Commission announced 26administrative penalty of inside story business, including the insider trading operates caseviolating by judiciary system, there are 38 time of inside insider trading operates case,this passage adopt the Logistic model to carry out demonstration analysis on insidertrading to make out the major factor effect company achievement front and back theinsider trading.In the end, from the characteristic of the model, we find that, long time beforeinformation announcement, the main factor affects company achievement is stock rightstructure factor and risk factor. Because in this paragraph of time, significant information'sis not the most important factor affects company, representing significant informationrelevance. The index representing significant information has not become the notablerelevance factor. A short time near information announcement, the main factor affectscompany achievement is significant information and company scale. During this paragraphof time, significant information's is the most important factor affects company, thereforethe index representing significant information becomes the notable relevance factor. That isto say, there is a notable defeated relation between insider trading probability value andcorporate assets scale. Because if the company is big, the market will pay more attention toit and personal information will excavated easily. Inside trading happens increasingly feely,Vice versa.