Insider trading and climate disasters

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dc.citation.volume62
dc.contributor.authorMa R
dc.contributor.authorMarshall BR
dc.contributor.authorNguyen HT
dc.contributor.authorNguyen NH
dc.contributor.authorVisaltanachoti N
dc.date.accessioned2024-10-15T22:14:56Z
dc.date.available2024-10-15T22:14:56Z
dc.date.issued2024-09
dc.description.abstractClimate 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.
dc.description.confidentialfalse
dc.edition.editionSeptember 2024
dc.identifier.citationMa R, Marshall BR, Nguyen HT, Nguyen NH, Visaltanachoti N. (2024). Insider trading and climate disasters. Global Finance Journal. 62.
dc.identifier.doi10.1016/j.gfj.2024.101024
dc.identifier.eissn1873-5665
dc.identifier.elements-typejournal-article
dc.identifier.issn1044-0283
dc.identifier.number101024
dc.identifier.piiS1044028324000966
dc.identifier.urihttps://mro.massey.ac.nz/handle/10179/71735
dc.languageEnglish
dc.publisherElsevier Inc
dc.publisher.urihttps://www.sciencedirect.com/science/article/pii/S1044028324000966
dc.relation.isPartOfGlobal Finance Journal
dc.rights(c) The author/sen
dc.rights.licenseCC BY-NC-ND 4.0en
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/en
dc.subjectInsider trading
dc.subjectClimate disaster
dc.subjectInvestor behavior
dc.titleInsider trading and climate disasters
dc.typeJournal article
pubs.elements-id491187
pubs.organisational-groupOther
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