Corporate Social Responsibility、corporate Governance And Insider Trading

Since January 1,2006,with the promulgation of the new “Securities Law” and the new “Company Law”, the insider trading behavior in China’s capital market was first allowed.But at the same time,the two new laws set the insider trading timing, trading methods and information disclosure strictly,such as the timely disclosure of relevant information at the stock exchange、the prohibition of short-term trading、the prohibition of trading in the sensitive periods and so on. The insider trading in this paper refers to the behaviour of the insider to trade their own company’s stocks,including trading in the Secondary Market 、 block trading and competitive price transaction. But “insider trading” refers to:people informed of insider information on securities trading and people who get insider information illegally make use of insider information to make securities trading.Unfortunately,these insiders’ ability to accurately select the trading time is always questioned by the outside investors, the reason is that these insiders have more information about the company’s operations and the company’s future development,and they are likely to use these advantages information to trade for profit.The insider trading will undoubtedly hurt the fairness of our capital market and combat the confidence of the outside investors.So,do these insiders take the information advantage to obtain abnormal returns?What factors can reduce the insider trading?These are the problems that this paper tries to study.In this paper, we choose the insider trading of Shang Hai Stock Exchange and Shen Zhen Stock Exchange in 2009-2013 as our research object.Firstly,we examines the impact of corporate social responsibility on the insider trading.Secondly we examine whether there is a substitute relationship between corporate social responsibility and corporate governance.We find these conclusions:(1)In the buying sample,the relationship between corporate social responsibility and the level of insider trading profit is not consistent in different time window period. In the long term,there is a significant negative correlation between the corporate social responsibility and the insider trading profit level,but in the short term the relationship between the two is positive;(2) In the long term and medium term,there is a significant negative correlation between the corporate social responsibility and the insider trading profit level, and in the short term the relationship is negative but not significant;(3) In general, good corporate governance level in the suppression of the role of the insider trading is the same as corporate social responsibility.In this paper,we prove the inhibitory effect on the insider trading of the corporate social responsibility and corporate governance.This paper can supplement the literature of insider trading,and also can provide evidence for policy makers to regulate insider trading.