Identification Methods And Empirical Test Of China’s Stock Market Insider Trading Behavior

Insider trading is a phenomenon of China’s stock market which is an emergingmarket，insider trading is repeated prohibitions. Insider trading of the stock market is anillegal behavior，and seriously disturbed the normal order of securities market andhinder the play of the stock market basic functions. First，insider trading makes themarket price can’t correctly reflect the real value of the stock market and be loss of theresource allocation function; Second，insider trading weakened the confidence of themedium and small investors and increased the volatility of stock market，and couldeven lead to market collapse；Third，insider trading damages the environmentalconstruction of securities market， there is likely to weaken the internationalcompetitiveness of a country’s stock market.This paper first summarize the views of the scholars at home and abroad，andintroduced research work of this article.Second,insider information, insider and insiderbehavior which are elements of the insider information are defined and it described therelevant provisions of China’s ban on insider trading. Again introduced the twomethods to identify insider trading：the neural network and statistical indicators basedon the event study method.And then use the two methods described above，selectsamples to conduct the empirical study，and the effectiveness of the detection andidentification methods..There are the main conclusions of this paper. The neural net models and statisticalindicators based on event study can identify insider trading to a certain extent, andprovides a strong basis to further judicial investigation for securities regulatoryauthorities to effectively crack down on insider trading behavior.