This dissertation consists of two essays on corporate finance. Essay one examines whether corporate governance affects firm performance after capital investments. I find that among firms with weak corporate governance, those with high abnormal capital investments have significantly lower stock performance than those with low abnormal capital investments. In addition, a significant portion of the difference in abnormal stock performance between the two subgroups occurs around earnings announcements. In contrast, the level of abnormal capital investments is not related to subsequent stock performance or earnings announcement returns at firms with strong corporate governance. These findings indicate that corporate governance structure enhances firm value by mitigating the over-investment problem. Essay two examines how insider trading activity prior to seasoned equity offerings (SEOs) is related to subsequent investment, operating, and financing decisions of the issuer. I find that SEO firms with more abnormal insider sales issue more seasoned equity, hold more cash and increase dividend payouts more. They also perform more poorly. Following the SEO, these firms also issue less equity and the effects of the SEO on their capital structures gradually reverses. These findings suggest that SEO firms with more abnormal insider sales are more likely to have overpriced stock, while those with less abnormal insider sales are more likely to have good investment opportunities. Insider trading activity prior to the SEO provides valuable information about the firm’s incentives to issue seasoned equity and help to predict the real activities of the issuer following the SEO. / text

In Essay 1, I investigate the impact of corporate life cycle dynamics on the observed negative association between asset growth and stock returns in the crosssection. I find that the asset growth effect on average exists across some life cycle stages measured using cohorts. However, controlling for certain variables associated with the theoretical explanations, I find there is no relation between asset growth and returns. I argue this evidence is consistent with an agency-based explanation of the asset growth effect. Furthermore, a decomposition of the drivers of the effect shows that different components of assets (i.e. working capital and financing) drive asset growth effect at different life cycle stages. From a decomposition analyses, results show that in the youngest firms (cohort 1), asset growth effect is mostly driven by both operating liability and stock financing on one side (financing) and noncash current assets, PPE, and growth in other assets (for working capital) while cohort 3’s drivers appear to be stock issuances, together with noncash current assets, which I conclude offer further support for agency issues. In Essay 2, I examine how firms’ life cycle affect insider trading behavior, profits surrounding trades, price informativeness, and financing constraints. I argue that if firms’ policies and characteristics change over time as shown in lifecycle literature, then from firm characteristics that motivate insider-trading behavior, one should observe some differences across varying life cycle stages measured using age cohorts. I find that insiders are net sellers at all life cycle stages of a firm. Furthermore, insiders tend to trade more in younger firms than in older firms even though they have fewer numbers of insiders trading. Trading characteristics are generally statistically significant across cohorts. Overall, insiders appear to predict the correct direction for positive wealth generation when trading. Specifically, at all lifecycle stages, they appear to sell before negative CARs, and buy during periods associated with negative CARs that lead to positive CARs days after insider transactions. The findings on price informativeness suggest that in general insider purchases enhance price informativeness for firms at different lifecycle stages, however, this finding holds only for cohort 4 (oldest firms) in the case of insider sales. The implication of this finding is that regulation should be more lax towards purchases as compared to sales for firms, except for sales in firms that are older. Lastly, insider trades are linked with positive investment-cash flow sensitivities for both insider purchases and insider sales, which generally increase monotonically across cohorts. This finding is robust to using GMM approach. / Includes bibliography. / Dissertation (Ph.D.)--Florida Atlantic University, 2018. / FAU Electronic Theses and Dissertations Collection

by Leung Wai Yuen and Wong Che Keung. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1995. / Includes bibliographical references (leaves 79-81). / ABSTRACT --- p.iv / ACKNOWLEDGMENT --- p.v / TABLE OF CONTENTS --- p.vi / LIST OF TABLES --- p.x / LIST OF FIGURES --- p.xi / Chapter / Chapter I. --- INTRODUCTION --- p.1 / Background --- p.1 / Objective of This Study --- p.5 / Chapter II --- THE DEVELOPMENT OF THE STOCK MARKET IN HONG KONG --- p.6 / Development of the Stock Exchange --- p.6 / Performance of the Stock Market --- p.10 / Chapter III --- CURRENT SITUATION OF THE SEHK --- p.14 / Performance in 1994 --- p.14 / Future Development of the SEHK --- p.19 / Chapter IV --- REGULATORY ENVIRONMENT IN HONG KONG --- p.20 / History of Securities Legislation in Hong Kong --- p.20 / Regulatory Hierarchy of the Securities Market in Hong Kong --- p.24 / The Securities and Futures Commission --- p.25 / Mission and Functions of the SFC --- p.25 / Chapter V --- SECURITIES (INSIDER DEALING) ORDINANCE --- p.29 / Definition of Insider Dealing --- p.29 / The Insider Dealing Tribunal --- p.30 / Chapter VI --- SECURITIES (DISCLOSURE OF INTEREST) ORDINANCE --- p.32 / Gist of the Ordinance --- p.32 / Duties of Substantial Shareholders --- p.33 / Disclosure of Directors and Chief Executives --- p.34 / Interests That Can be Disregarded --- p.35 / Penalties for Breaches --- p.36 / Chapter VII --- LITERATURE REVIEW --- p.37 / Research on Overseas Stock Markets --- p.37 / Watchdog Report by Credit Lyonnais --- p.42 / Chapter VIII --- METHODOLOGY --- p.43 / Data Sampling --- p.43 / Definition of Insider Activities Index --- p.45 / Design of the Study --- p.46 / Chapter IX --- RESULTS AND IMPLICATIONS --- p.50 / Industry Type --- p.50 / Company Size --- p.51 / Seasonal Effect --- p.52 / Ownership Concentration --- p.53 / Chapter X --- CONCLUSION AND RECOMMENDATIONS --- p.55 / Conclusion --- p.55 / Recommendations for Further Studies --- p.56 / APPENDICE --- p.58 / Appendix 1 --- p.59 / Appendix 2 --- p.63 / Appendix 3 --- p.67 / Appendix 4 --- p.71 / Appendix 5 --- p.73 / Appendix 6 --- p.75 / Appendix 7 --- p.77 / BIBLIOGRAPHY --- p.79

This paper examines the lockup expiration date event for technology firms post Global Financial Crisis to investigate the existence of abnormal returns around this date and determine the explanatory power that insider trading and the increase in available shares have on the abnormal return. Contributions to literature include using an updated sampling, targeting the technology industry, and constructing unique variables such as the dollar value of insider trades around the lockup expiration date. There exists statistically significant three-day cumulative abnormal returns of -1.33%. Firms with higher percentages of insiders who sell their positions tend to experience a further decrease in cumulative abnormal returns (CAR). The supply effect of these shares being opened to the market is not significant at the 95% confidence level. Thus, insider trading rather than increased supply accounts for variations in the abnormal returns across technology firms.

I have examined the common stock investments made by members of the U.S. Senate between 2006 and 2009. I find that the average stock portfolio in the Senate exhibits one and two year cumulative abnormal returns (CARs) of -0.15 % and 0.43%, respectively. This suggests that members of the Senate are not trading on insider knowledge as indicated by one previous researcher who calculated a one year CAR of 25%. However, my findings are in line with another previous researcher who found a one year CAR of about -2% and concluded that Congressmen are not trading on inside information. I also examine election-year trades made by senators who lose a reelection bid. This cashing out effect amounts to a CAR of 0.43% during the first year post loss, but after two years these trades exhibit a CAR of -0.03%. The cashing out group performs no better than the group as a whole, indicating that this group did not use their informational advantage to profit during the lame duck session.

This thesis presents three models of asset pricing involving non-competitive behavior and asymmetric information. In the first model, a risk averse investor with private information about dividends trades shares over an infinite time horizon with risk neutral uninformed agents. The informed investor trades strategically in equilibrium. The second model also involves an infinite time horizon, but all agents are risk averse and equally informed about dividends. Non-competitive behavior is exogenously specified; price takers trade shares with a strategic investor who accounts for the effects of her trades on the stock price. In this case, an endogenous information asymmetry arises in equilibrium. Closed form equilibria are derived for both models and implications for price dynamics are explored. While the first model constitutes a new extension of the multiperiod Kyle model of insider trading, the second model generates more interesting price dynamics. If the strategic investor manages a large mutual fund, significant risk premia and price volatility may arise in equilibrium. In fact, if mutual fund participation is sufficiently widespread, multiple equilibria may exist. The third model extends the multiperiod Kyle model to a case where the insider observes a noisy signal of the stock's terminal liquidation value. An equilibrium much like Kyle's is derived. Price tends toward value over time, and stock price volatility depends on both the drift and volatility of the insider's private signal. Like the Kyle model, the insider's trading activity leaves no detectable trace in trading volume, expected returns, or price volatility.

Thesis (Ph.D.)--University of Nebraska-Lincoln, 2009. / Title from title screen (site viewed October 15, 2009). PDF text: viii, 117 p. : ill. ; 1.43 Mb. UMI publication number: AAT 3355631. Includes bibliographical references. Also available in microfilm and microfiche formats.

Thesis (Ph. D.)--University of Missouri-Columbia, 2006. / The entire dissertation/thesis text is included in the research.pdf file; the official abstract appears in the short.pdf file (which also appears in the research.pdf); a non-technical general description, or public abstract, appears in the public.pdf file. Title from title screen of research.pdf file (viewed July 31, 2007). Includes bibliographical references.

It is unfair to the investing public and detrimental to the interests of the security markets for a person to trade on the basis of inside information. In this short dissertation, the laws regulating insider trading in South Africa prior to the current legislative provisions are briefly discussed. It is found that the old provisions were inadequate in deterring and punishing insider trading activities. The current legislative provisions are analysed in detail. It becomes clear that whilst the current provisions are a substantial improvement on their predecessor, certain aspects need to be reconsidered. These include the widening of their scope to include trading in all kinds of derivatives; the reformulation of the statutory civil action and the empowerment of the securities regulation panel to bring a civil action against insider traders. / Private Law / LL.M.

abstract: Insider trading potentially reveals proprietary information, allowing rivals to compete more effectively against the insiders' firm. This paper examines whether proprietary costs are associated with insiders' trading decisions and the profitability of their trades. Using a variety of approaches to identify proprietary information risk, I find proprietary costs significantly deter insiders' trading activities. The deterrence effect is more pronounced when insider trading is likely to be more informative to rivals. Specifically, trades by top executives, non-routine trades, and trades at low complexity firms are curbed to a greater extent by proprietary costs. Examining the mechanisms of this deterrence effect, I find firms with higher proprietary costs are more likely to impose insider trading restrictions, and insiders' trading decisions are more sensitive to proprietary costs when they have higher share ownership of the company. These results suggest insiders reduce trading activities not only due to firm policies, but also due to incentive alignment. Finally, when insiders trade despite higher proprietary costs, they earn significantly higher abnormal profits from their purchase transactions. Overall, this study suggests product market considerations are an important factor associated with insiders' trading decisions and profitability of their trades. These findings are likely to be of interest to regulators and corporate boards in setting insider trading policies, and help investors make investment decisions using insider trading signals. / Dissertation/Thesis / Doctoral Dissertation Accountancy 2017