A Study On The Insider Trading Of The State-owned Enterprises Under The Influence Of The "Eight Rules"

In December 4,2012,the CPC Central Committee issued the eight regulations on improving the work style and close ties with the masses.Previous studies have shown that the "eight regulations" inhibit the high perks of state-owned enterprises in the past,while the "eight regulations" have little impact on the private enterprise executives.As the "rational person" in the state-owned enterprise,working hard in the course of business will require a return.When the incentives for perks are reduced,they may try their best to obtain more personal benefits than before.The study found that the "eight regulations" has led to the state-owned enterprise executives through insider trading to get more revenue.As an incentive to executives,insider trading has a certain substitution effect on perks.When the management of state-owned enterprises was inhibited by perks policy intervention,the management of state-owned enterprises have the motivation to get more profits through insider trading,in order to compensate for the incentive policy intervention by incentive leads to the reduction of personal loss.In order to make up for the efforts to improve the performance of enterprises,executives will seek certain personal gains as incentives.The greater the effort,the more incentives they need,and the two are positively related.As for the management of state-owned enterprises,incentive includes two aspects:explicit salary paid directly in the form of money,implicit personal consumption,personal gains from political promotion and so on.The management of state-owned enterprises has the advantage of information relative to the outside,and can get excess profits through insider trading.Insider trading is also an incentive form for the management of state-owned enterprises.Insider trading is an alternative to other forms of motivation.Domestic and foreign scholars have focused on whether insider trading can bring excess profits to insiders,the identification of insider trading,supervision of insider trading,insider trading and information disclosure.In addition,little research has been done on the incentives of insider trading to insiders.Domestic scholars focus on the "eight regulations " of the management of state-owned enterprises pay money and perks,but the relevant research change behavior of policy changes to the insider trading is still in the blank stage.In this study,the event study method is used to calculate the cumulative excess return,which effectively measures the profit level of insider trading.Using the double Difference in Difference model,this paper establishes regression model for related variables,and makes effective regression analysis.After the introduction of the "eight regulations",the insider trading of state-owned enterprise executives presents new features.It is found that the "eight regulations" have different effects on the management of the central state owned enterprises and local state-owned enterprises.Affected by the "eight regulations",the central state-owned enterprises have stronger ability to obtain excess returns.State owned executives get more money than their relatives do in trading.In addition,it was found that after the introduction of the eight regulations,different positions of state-owned enterprise executives involved in insider trading,their profit levels are also different.From the whole of the insider trading,for different positions of state-owned enterprise management,the higher the position,the greater the degree of profitability.As chairman of the board or the general manager of the internal,profitability is significantly stronger than other general duties of the internal.Finally,according to the conclusion of the study,this paper puts forward some reasonable suggestions for the implementation of the "eight regulations" of the state-owned enterprises and the establishment of the insider trading system of the state-owned enterprises.When the state-owned enterprises to implement the" eight regulations" requirements,standardize the management of state-owned enterprises in the consumer,should also pay attention to develop the effective rules and regulations to prevent the abuse of state owned enterprise management information advantage.Perfect insider trading supervision system and reasonable insider trading behavior are conducive to creating a healthy and transparent investment environment of securities market,and is conducive to safeguarding the interests of enterprise stakeholders.Because of the absence of owners for the sake of our country,the central state-owned enterprise insider control phenomenon is more prominent,to the management of insider trading profit of the gray area is relatively large,the problem of moral hazard prone to agents,the regulatory authorities should especially strengthen information disclosure of listed companies of the supervision of the central country,improve its internal control and the transparency of the company.The supervision and restriction of insider trading in the management of state-owned enterprises should pay particular attention to the restriction of insider trading in the central state-owned enterprise management.In the supervision of insider trading in state-owned enterprises,special attention should be paid to the insider trading behavior of higher position managers,especially the insider trading behavior of the chairman or general manager of state-owned enterprises.