In all listed companies, there are people who have close ties to the business, either as employees or directors, or indirectly through relationships with the company. Such individuals are usually named as insiders and often have information about the company's prospects that has not yet been made public or reflected in the stock's price. This information asymmetry between insiders and external investors can create a signal value when insiders trade in the company's stock. The interpretation and valuation of insider trading by external investors can then affect the share price, both positively or negatively depending on the type of trade.Previous studies show different results regarding whether insider trading generates abnormal returns or not. Some studies have shown that there is no systematic profitability in following insider trading, while others have shown that it can generate an abnormal return.The purpose of this study is to investigate whether insider trading generates abnormal returns and to investigate whether the abnormal return differs depending on position, year and transaction type. The study is conducted in the form of an event study to investigate the effect that insider trading has on a company's share price. The results of this study show that insider trading does not generate any abnormal return for the event period or for the event day, but that there are significant differences in CAAR between buy and sell transactions. The result also shows that there is no difference in abnormal returns between different positions or between different years.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:kau-95444 |
| Date | January 2023 |
| Creators | Nilsson, Martin, Bodén, Ludvig |
| Publisher | Karlstads universitet, Handelshögskolan (from 2013) |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf, application/pdf |
| Rights | info:eu-repo/semantics/openAccess, info:eu-repo/semantics/openAccess |
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