Study On Corporate Disclosure And Insider Trading From The Perspective Of Information Asymmetry

Information impounds in price through trading,and the price guides resources' configuration,so it is believed that the capital market is the market of information,assuring that the information impounds in price timely and effectively is important guarantee for the market to make full use of the function of allocating resources.However,in fact the information is unlikely to be in perfect and complete state,which makes the process of price discovery and equilibrium very complicated,so the study of information becomes the major content of market microstructure theory.In this paper,we discuss the company disclosure and insider trading under the circumstances of information asymmetry,and we mainly studies the problem on three aspects.Based on high-frequency data of real-time trades and quotes from Shanghai and Shenzhen Exchanges,we investigate the influence of corporate disclosure on information asymmetry among investors from the perspective of trading,using MRR model and GMM estimation method.It is found that with the development of the quality of corporate disclosure,information asymmetry among investors increases initially and decreases eventually.The result holds still considering the specific questions of model setting.Considering earning announcement as incident,this paper investigates whether senior officers and other insiders manipulate earnings to meet earnings forecast through accrual-based earnings management before insider trading.By distinguishing between senior officers and other insiders,this study is intended to figure out the reasoning behind transactions of insiders.The result shows that companies with higher discretionary accruals are more likely to meet earnings forecast,and senior officers tend to sell stocks after the earnings forecast is achieved,while there is no such evidence for other insiders.This research provides evidences and suggestions for regulatory and companies' intern governance.After we find the evidence of illegal profit of the senior officers,this paper studies the means of supervision of insider trading,and we find high quality information disclosure can significantly lower the income level of insider trading,meanwhile we find insiders intend to sell in advance to lock in gains in anticipation of losses,and we give opinions and suggestions on the basis of conclusion.