Browsing by Author "Nguyen HT"

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    Insider trading and climate disasters
    (Elsevier Inc, 2024-09) Ma R; Marshall BR; Nguyen HT; Nguyen NH; Visaltanachoti N
    Climate disasters are increasing in frequency and severity. While a large body of research has shown that extreme climate affects various economic decisions, how climate events influence investment decisions remains largely under-investigated. This paper examines whether, and to what extent, climate disasters influence insider transactions, which are important investment decisions that attract increasing attention from both corporate management and policymakers. We find that the monthly value of insider trades increases markedly in firms headquartered in counties with a climate disaster. Climate-induced insider trading holds in general but is stronger when investors are distracted and less prevalent when insiders face higher litigation risk. Climate disasters trigger uncertainty about short-term firm fundamentals, and insiders benefit by selling prior to this being priced. Insiders living in disaster counties do not trade more than those in unaffected counties, which does not support a personal liquidity motivation. Our paper documents a new way through which climate impacts investor behavior and financial markets.
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    Upholding integrity: The influence of executives’ backgrounds on corporate information environment
    (Elsevier B V, 2025-06) Hoang Vu N; Dang HV; Nguyen HT; Pham MH
    Motivated by the roles of corporate management in shaping corporate decisions and the importance of stock liquidity in financial markets, we examine whether trust in management influences the liquidity costs of the firm that they manage. Using manually collected propriety data from several datasets, this study documents that firms led by ex-military CEOs are associated with higher stock market liquidity than firms run by non-military CEOs. Military CEOs influence stock liquidity by improving their firms’ information environment and reducing performance volatility. Firms led by military CEOs have higher social capital, higher levels of voluntary disclosure, fewer stock price delays, and lower levels of informed trading. In addition, firms run by military CEOs have lower costs of capital and default risk. Overall, consistent with behavioral consistency theory, our findings highlight the importance of executives’ early-life experience in reducing information frictions, fostering trust, and improving secondary market quality. “I think of all the time I spent in the military and in law enforcement and the many times I saw someone do the right thing because it was the right thing to do. The essence of integrity is what you do in and of yourself — you must be true to yourself.” ---Patrick O'Toole, Director & Executive Vice President, HealthMarkets Insurance Agency.