Research On Corporate Information Transparency And Informed Trading

Currently informed trading often occurs in the stock market.Informed traders can use of private information to make profit directly or indirectly.The current regulatory system focuses on supervision after happening,which is at the cost of uninformed traders' interest.The academic community is also trying to provide preventive measures by studying the influence factors of informed trading.Information transparency of company is an important measure of corporate governance and determines information asymmetry between investors,which will affect the extent of informed trading.This paper studies this question at major contract announcement events background due to the signing of major contracts to increase the company's revenue,is good for investors,the company's internal staff and the other party as an insider,is likely to seek huge use of private information interests.In a word,informed trading mainly takes place in the phase of signing a major contract.In this paper,firstly,it introduces the research background,the research significance,the main content and the main innovations.Secondly,the literature about information transparency and informed trading is sorted and commented.Thirdly,the theory of corporate information transparency and informed trading is discussed.Fourth,the mechanism of informed trading affected by the information transparency is described,regression model were established based on the choice of research method and analyst event data as metrics.Finally,based on the 2010 to 2012 as a study period and the Shanghai's and Shenzhen's listed companies which access to major contracts event as a research object,empirical test of the relationship between the information transparency and informed trading was taken,which was.The study found:?Because some investors have known the private information of major contract in advance,and make the appropriate response.There may be informed trading in major contracts event.?Informed trading was more likely to occur in the event of acquiring a major government procurement contract rather than acquiring major non-governmental procurement contracts.? State-owned listed companies are more likely to occur informed transactions compared to non-state-owned listed companies in the event of acquiring a major government procurement contract.? The higher transparency of information,the lower probability of informed trading.What is more,this effect will be slightly larger in major government procurement contracts.The results of this study are illustrated:the government should improve the information disclosure system and standardize the information disclosure(especially state-owned company's major government procurement contracts).And the penalties on informed trading should be increased to achieve the aim of reducing the informed trading.For the listed company,the information disclosure and the informed information filing system of major contracts should be strengthened.For investors,rational investment was encouraged and the securities investment in the lower information transparency of the company should be more cautious.