Corporate Governance and Opportunistic Insider Trade

Publication Type

Conference Paper

Publication Date



We study the effect of informed trading by U.S. executives on shareholder value. We develop a proxy of insider trading that is driven by management’s private information. We find that our proxy is negatively associated with future earnings performance and contemporaneous stock prices. Our proxy is also positively associated with a common indicator of managerial opportunism, earnings misstatements that result in subsequent restatements. Moreover, the level of our informed trading proxy declines significantly after announcements of earnings restatements, which are usually accompanied with significant corporate governance improvement. Overall, our results suggest that the types of informed trading we identify represent managerial opportunism that reduces shareholder value.


informed trading, Managerial Opportunism, shareholder value


Accounting | Business Law, Public Responsibility, and Ethics | Portfolio and Security Analysis

Research Areas

Corporate Governance, Auditing and Risk Management


American Accounting Association Annual Meeting

City or Country

New York, USA