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Asymmetric trading by insiders: comparing abnormal returns and earnings prediction in Spain and Australia

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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Asymmetric trading by insiders: comparing abnormal returns and earnings prediction in Spain and Australia. / Goncharov, Igor; Hodgson, Allan C.; Lhaopadchan, Suntharee et al.
In: Accounting and Finance, Vol. 53, No. 1, 03.2013, p. 163-184.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Goncharov, I, Hodgson, AC, Lhaopadchan, S & Sanabria Garcia, S 2013, 'Asymmetric trading by insiders: comparing abnormal returns and earnings prediction in Spain and Australia', Accounting and Finance, vol. 53, no. 1, pp. 163-184. https://doi.org/10.1111/j.1467-629X.2011.00461.x

APA

Goncharov, I., Hodgson, A. C., Lhaopadchan, S., & Sanabria Garcia, S. (2013). Asymmetric trading by insiders: comparing abnormal returns and earnings prediction in Spain and Australia. Accounting and Finance, 53(1), 163-184. https://doi.org/10.1111/j.1467-629X.2011.00461.x

Vancouver

Goncharov I, Hodgson AC, Lhaopadchan S, Sanabria Garcia S. Asymmetric trading by insiders: comparing abnormal returns and earnings prediction in Spain and Australia. Accounting and Finance. 2013 Mar;53(1):163-184. doi: 10.1111/j.1467-629X.2011.00461.x

Author

Goncharov, Igor ; Hodgson, Allan C. ; Lhaopadchan, Suntharee et al. / Asymmetric trading by insiders : comparing abnormal returns and earnings prediction in Spain and Australia. In: Accounting and Finance. 2013 ; Vol. 53, No. 1. pp. 163-184.

Bibtex

@article{67b560260973408cac813cdebee05f9d,
title = "Asymmetric trading by insiders: comparing abnormal returns and earnings prediction in Spain and Australia",
abstract = "This paper examines whether the {\textquoteleft}external governance{\textquoteright} imposed by comparative financial accounting standards reduces the trading advantage of insiders. We do this by directly comparing insider trading returns and insider{\textquoteright}s ability to predict future earnings from accruals in Spain and Australia. Results show higher excess returns and greater prediction of future earnings from conditioned insider trading in Australia that is then utilized by financial analysts to lower forecast errors – particularly in contrarian-based accruals trading. Possible explanations include: (i) a high asymmetric quality for market-based accruals, (ii) information transfer from informed insiders to uninformed insiders and financial analysts and (iii) a more timely dissemination of financial information in Spain through different ownership and governance structures.",
keywords = "Insider trading, Earnings predictability , Market-based accounting accruals , Analyst forecasts , Information asymmetry",
author = "Igor Goncharov and Hodgson, {Allan C.} and Suntharee Lhaopadchan and {Sanabria Garcia}, Sonia",
year = "2013",
month = mar,
doi = "10.1111/j.1467-629X.2011.00461.x",
language = "English",
volume = "53",
pages = "163--184",
journal = "Accounting and Finance",
issn = "0810-5391",
publisher = "Wiley-Blackwell",
number = "1",

}

RIS

TY - JOUR

T1 - Asymmetric trading by insiders

T2 - comparing abnormal returns and earnings prediction in Spain and Australia

AU - Goncharov, Igor

AU - Hodgson, Allan C.

AU - Lhaopadchan, Suntharee

AU - Sanabria Garcia, Sonia

PY - 2013/3

Y1 - 2013/3

N2 - This paper examines whether the ‘external governance’ imposed by comparative financial accounting standards reduces the trading advantage of insiders. We do this by directly comparing insider trading returns and insider’s ability to predict future earnings from accruals in Spain and Australia. Results show higher excess returns and greater prediction of future earnings from conditioned insider trading in Australia that is then utilized by financial analysts to lower forecast errors – particularly in contrarian-based accruals trading. Possible explanations include: (i) a high asymmetric quality for market-based accruals, (ii) information transfer from informed insiders to uninformed insiders and financial analysts and (iii) a more timely dissemination of financial information in Spain through different ownership and governance structures.

AB - This paper examines whether the ‘external governance’ imposed by comparative financial accounting standards reduces the trading advantage of insiders. We do this by directly comparing insider trading returns and insider’s ability to predict future earnings from accruals in Spain and Australia. Results show higher excess returns and greater prediction of future earnings from conditioned insider trading in Australia that is then utilized by financial analysts to lower forecast errors – particularly in contrarian-based accruals trading. Possible explanations include: (i) a high asymmetric quality for market-based accruals, (ii) information transfer from informed insiders to uninformed insiders and financial analysts and (iii) a more timely dissemination of financial information in Spain through different ownership and governance structures.

KW - Insider trading

KW - Earnings predictability

KW - Market-based accounting accruals

KW - Analyst forecasts

KW - Information asymmetry

U2 - 10.1111/j.1467-629X.2011.00461.x

DO - 10.1111/j.1467-629X.2011.00461.x

M3 - Journal article

VL - 53

SP - 163

EP - 184

JO - Accounting and Finance

JF - Accounting and Finance

SN - 0810-5391

IS - 1

ER -