Profitability of Insider Trading: A Cross-country Analysis on European Markets

Abstrakt

This thesis takes on an international business perspective to analyze the returns earned by corporate insiders in eight European countries between 2012–2018. By employing a performance evaluation methodology based on insiders’ reported transactions, we establish that insiders in only a few countries earn statistically signifcant abnormal returns. To shed further light on insiders’ profts, we investigate the efects of trade- and frm-specifc factors. The results are mixed, suggesting that diferent factors matter in diferent countries. Finally, we examine what impact the introduction of the EU Market Abuse Regulation (MAR) has had on insiders’ returns. Our results suggest that MAR has had little impact on returns, which could either indicate that the regulation is inefective or that it is still too early to observe its full efect. The implications of our fndings should be of interest to scholars within the international business discipline and policymakers in their eforts to regulate insider trading on the capital markets.