Enterprise and Innovation

Permanent link for this collection

https://hdl.handle.net/10292/1125
Enterprise and Innovation is the name of the Research Paper Series of the Business School at AUT (ISSN 1176-1997). Enterprise and Innovation serves as an interdisciplinary forum for original research undertaken within the Business School, highlighting and supporting the active research culture here. The aims of the forum are to provide a channel for the dissemination of working papers for discussion prior to subsequent development.

Browse

Browsing Enterprise and Innovation by Author "Gilbert, A"

Now showing 1 - 5 of 5
  • Thumbnail Image
    Item
    Do insiders crowd out analysts?
    (AUT Faculty of Business, 2004) Gilbert, A; Tourani-Rad, A; Wisniewski, T
    Both insiders and analysts are involved in the collection and dissemination of information to the market, roles which impact heavily on price efficiency and resource allocation. The differences between the two groups, however, result in a competitive relationship with analysts at a disadvantage as they face greater costs associated with information gathering. As a result they may choose not to participate in a onesided competition. We employ transaction data to examine the impact of firm-year aggregate insider trading intensity on the level of analyst following. We find a negative relationship between insider trading intensity and analyst coverage. This result was driven by large blockholders suggesting that analysts are attracted to higher levels of information asymmetry from which they profit.
  • Thumbnail Image
    Item
    Insider trading, regulation and the components of the Bid-Ask Spread
    (AUT Faculty of Business, 2005) Frijns, B; Gilbert, A; Tourani-Rad, A
    Insiders pose a risk to providers of liquidity, who require compensation for this and consequentially widen spreads. In this paper we investigate the relationship between insider trading regulation and the cost of trading by decomposing the components of the spread before and after the enactment of strict new laws. We find a significant decrease in information asymmetry, which is mainly observed in illiquid and high prechange information asymmetry companies. Results are robust to model specification. We also see a decrease in the contribution of information asymmetry to price volatility. Overall, our results may have implications for markets with similar characteristics.
  • Thumbnail Image
    Item
    Insiders and the law: the impact of Regulatory Change on Insider Trading
    (AUT Faculty of Business, 2004) Gilbert, A; Tourani-Rad, A; Wisniewski, T
    The impact of regulations in minimizing the detrimental effects of insider trading is unsettled. In this paper, we investigate the impact of the introduction of the Securities Market Amendment Act 2002 in New Zealand on several aspects of the market. After examining a sample of companies listed before and after the new laws introduction, we find strong evidence of a reduction in the cost of capital, bid-ask spreads and volatility accompanied by increases in liquidity, all as predicted. We conclude that the change in regulations has had a positive impact on the market.
  • Thumbnail Image
    Item
    The impact of regulations on the informational basis of insider trading
    (AUT Faculty of Business, 2006) Gilbert, A; Tourani-Rad, A
    While insider trading has been regulated in the vast majority of countries with financial markets, the efficacy of these regulations has only been sparsely examined. In this paper we examine the impact of major regulatory changes in New Zealand on the profitability and informational basis of insider transactions. We conclude that the law changes have both significantly reduced the profitability of insider trading and forced insiders to change the source of the information they use from private information to knowledge of market misvaluation. The results show that well constructed insider trading laws can be effective in controlling insider behaviour and profitability.
  • Thumbnail Image
    Item
    The impact of Regulatory Change on Insider Trading Profitability: some early evidence from New Zealand
    (AUT Faculty of Business, 2004) Gilbert, A; Tourani-Rad, A; Wisniewski, T
    This paper adds to the scant literature on the tightening of regulations and its impact on the profitability of insider trades by examining the effects of the recent enactment of the Securities Market Amendment Act 2002 in New Zealand. We investigate the abnormal returns around the date of insider transactions both before and after the introduction of this Act. We find that the number of insider transactions decreased just prior to the introduction of the Act; further we observe a marked reduction in profitability of directors. However, the difference between the pre and post-change returns lacks statistical significance.
Items in these collections are protected by the Copyright Act 1994 (New Zealand). These works may be consulted by you, provided you comply with the provisions of the Act and the following conditions of use:
  • Any use you make of these works must be for research or private study purposes only, and you may not make them available to any other person.
  • Authors control the copyright of their works. You will recognise the author’s right to be identified as the author of the work, and due acknowledgement will be made to the author where appropriate.
  • You will obtain the author’s permission before publishing any material from the work.