A Study on the Relationship of Insider Trading and Structure of Board of Directors-An Example of Financial Forecast Public Notification

• Main Authors: HUI-LUNG, HUANG, 黃慧龍
• Other Authors: YANN-CHING, TSAI
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/71291500905954975073

碩士 === 中國文化大學 === 會計研究所 === 91 === This study is intended to realize the relationship between returns and trading vol-ume from insider trading before public electronic firms publish their financial forecast, and examines the possible degree of insider trading. Can the inner controlling mecha-nism of corporate, from further using the degree of the corporate governance, reduce the insider trading effectively by the structuring of the board of directors? The sampling framework is consisted of the electronic corporations listed on the Taiwan Stock Exchange in the period of 2001. After eliminating corporations with missing data, the total final samples of corporations are 189. Using LMSW (2001) to identify the motive of insider trading, this study treats the first public financial forecast of public notification as the event date. And the structure of the board of the directors includes: (1) the size of the board of directors; (2) the proportion of directors and super-visors’ shares; (3) the proportion of directors and supervisors’ collateralized shares; (4) the proportion of institutional investors’ seats. The major findings are summarized as follows: (1) The trading behavior of public electronic firms shows the phenomena of insider trading; (2) There is strong evidence supporting a positive relationship between the size of the board of the directors and in-sider trading; (3) There is no obvious evidence supporting a negative relationship be-tween the proportion of directors as well as supervisors’ shares and insider trading; (4) There is no obvious evidence supporting a positive relationship between the proportion of directors as well as supervisors’ collateralized shares and insider trading; (5) There is strong evidence supporting a positive relationship between the proportion of institu-tional investors’ seats and insider trading.