Research On The Market Reaction Of Insider’s Increase And Decrease In Listed Companies

To promote the steady development of the capital market and safeguard the interests of investors is the focus of financial development and supervision in the new era.In recent years,the increase and decrease behavior of insiders of listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange is active,which has a profound impact on the market.The active increase and decrease behavior of insiders in listed companies is easy to attract investors’ attention,affect investors’ expectations,trigger investment trading behavior,cause stock price fluctuations,produce excess market reaction,and may also infringe on investors’ interests.Therefore,it is of great significance to study the market reaction of increase and decrease behavior of insiders in listed companies.Based on the perspective of investor concern,this paper studies the mechanism of insider’s increase and decrease behavior of listed companies affecting market reaction.From 2011 to2021,11,994 increase and decrease records of insiders of 1552 listed companies in Shenzhen Stock Exchange and Shanghai Stock Exchange are selected as research samples.This paper analyzes the effect of insider’s increase and decrease behavior on the cumulative excess return of stock price of listed companies through empirical test,analyzes the action mechanism adopted by investors to pay attention,and further tests the differences in the degree of market reaction to the increase and decrease of insider holdings in listed companies due to different transaction subjects,property rights and information transparency.The results of this paper are as follows: First,the increasing behavior of insiders of listed companies has a significant positive impact on the market reaction;The decreasing behavior of insiders in listed companies has a significant negative impact on the market reaction.Secondly,through the mechanism of action test,it is found that investor attention plays a mediation effect in the process of insider’s increasing holdings of listed companies affecting the market reaction and plays a suppression effect in the process of insider’s decreasing holdings of listed companies affecting the market reaction.Third,through the heterogeneity test,it is found that in the overholding event,listed company executives,state-owned listed company insiders and listed company insiders with low information transparency have a more significant positive impact on the market reaction.In the event of reducing holdings,relatives of senior executives of listed companies,insiders of private listed companies and insiders of listed companies with low information transparency have a more significant negative impact on market reaction.Under the background of the normal increase and decrease of insider holdings in listed companies,this paper holds that: first,regulators should coordinate to promote the supervision of the increase and decrease of insider holdings in listed companies,broaden the target of supervision,improve the regulatory system,and reduce the information asymmetry between insiders and investors in listed companies.Second,listed companies should improve the quality of internal control,restrict the information advantages of insiders,and strengthen the compliance awareness of the increase and decrease of insiders’ holdings.Third,investors should improve their investment analysis ability,link the increase and decrease of insider holdings of listed companies with the fundamental development of the company,and establish the investment concept of sizing up the situation.