Insider Trading:Money Flow Before Significant Events Announcement

Adopting2010~2012stock sample, this thesis focuses on insider trading beforesignificant events announcement in China’s stock market from the new perspective ofmoney flow. Empirical results show that, money flow before good performance noticeis larger than money flow before bad performance notice, money flow before analystraising investment rating is larger than money flow before analyst lowering investmentrating, proportion of shareholder large reduction is negative with money flow beforeshareholder large reduction, the money inflow is higher before M&A success than failue,the dividend before announcment is positive with the institution buying beforeannouncment, the incentive propotion is positive with money inflow before equityincentive success. Overall speaking, the money inflow before stock price soaring islarger than slump, the institution buying before stock price soaring is larger than slump,insider trading is obvious before significant events announcement. If significant event isgood news, insider will buy in advance, if significant event is bad news, insider will sellin advance, and insider gains abonormal return. This thesis presents a new researchperspective, and empirical results help deepen our understanding of insider tradingmethods in China’s stock market.