Insider Trading as A Vehicle to Appropriate Rent From R & D  

Oleh:

Coff, Russel W. ; Lee, Peggy M.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Strategic Management Journal vol. 24 no. 2 (2003), page 183-190.
Topik: trading; knowledge; insider trading; rent appropriation; competitice advantage

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: SS30.11 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

Lihat Detail Induk

Isi artikel

While most insider trading is routine and legal, investors still treat is as new information about the firm's prospects, they assume that trades reflect managers' attempts to profit from ther private information, This article explores insider trading as a mechanism to appropriate rent from R & D advances. We analyze stock price reactions to over 134,000 insider - trading events and find that insider purchases generate larger positive stock price reactions for R & D intensive firms. Investors seem to assume that managers use insider trading to appropriate rent from R & D breakthroughs. We discuss how shareholders may prefer this rent appropriation mechanism over other forms of compensation that directly reduce the firm's income.

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