Empirical analysis of insider trading in recent brazilian mergers and acquisitions

Authors

  • Marcos Antônio de Camargos Faculdade Novos Horizontes
  • Julio Alfredo Racchumi Romero UFMG; CEDEPLAR
  • Francisco Vidal Barbosa UFMG; FACE; CEPEAD; CAD

DOI:

https://doi.org/10.5700/issn.2177-8736.rege.2008.36653

Keywords:

Insider Trading, Merger and Acquisitions, Abnormal Return, Market Behavior Shares

Abstract

Insider trading creates opportunities for some agents in the market to profit in detriment of others thereby transferring wealth between shareholders. Announcement of a merger or acquisition is an opportunity for this practice as it usually causes significant price changes and impacts stock market expectations of these agents. An analysis was made to detect insider trading in recent mergers and acquisitions by large Brazilian companies, An Event Study searched for abnormal returns and compared averages of variables signaling behavior in the market (liquidity) for common and preferred stocks as well as American Depositary Receipts of ten companies. Empirical analysis identified insider trading by abnormal returns and volumes of trading with increased liquidity prior to announcement of the event.

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Published

2008-12-01

How to Cite

Camargos, M. A. de, Romero, J. A. R., & Barbosa, F. V. (2008). Empirical analysis of insider trading in recent brazilian mergers and acquisitions . REGE Revista De Gestão, 15(4), 55-70. https://doi.org/10.5700/issn.2177-8736.rege.2008.36653

Issue

Section

Finanças