Impact Of Executive's Overseas Experience On Insider Trading

The development of the capital market has brought many conveniences to the society,but it is undeniable that there is a problem that the illegal activities that leak inside information to conduct transactions are frequent and prone.According to the "Summary of Administrative Penalties by the China Securities Regulatory Commission",the current insider trading incidents that are investigated and dealt with are mostly related to major asset restructuring information,and high levels of executive involvement.The complexity of major asset restructuring events makes the supervision of insider trading more difficult.The undisclosed and significant nature of insider trading information itself makes insider trading have a significant impact on stock prices,which can be manifested as large fluctuations in stock returns before the official information disclosure date.As China's economy continues to develop,more and more talents with overseas experience are entering China's listed companies as executives.Long-term overseas experience will make executives have a stronger sense of observance of laws and regulations and internalize them in to improve personal morality and influence corporate governance.This article is based on the principal-agent theory,information asymmetry theory,high-level echelon theory and imprinting theory.It adopts the event research method and takes the major asset restructuring events of A-share listed companies between 2014 and 2018 as samples to study the overseas experience of senior executives.The impact of the transaction.The insider trading effect IE is calculated by calculating the cumulative excess return rate CAR before the information disclosure date,and the insider trading is measured.The research results show that:(1)In the full sample,the coefficient of the insider trading effect of executives 'overseas experience is significantly negative,indicating that it has a suppressive effect on insider trading;(2)When the company's internal governance level is weak,those with overseas experience Executives show a significant inhibitory effect on insider trading,which may be due to the lower management shareholding,the willingness of management to perform due diligence in the company's business process is lower than that of a higher shareholding Insider trading may occur;(3)The institutional environment can have a significant impact on the relationship between executives 'overseas experience and insider trading.In regions where the marketization process is fast,executives with overseas experience have a significant inhibitory effect on insider trading;(4)Compared with state-owned enterprises,in non-state-owned enterprises,executives overseas experience can significantly reduce insider trading Effect;(5)Under the premise of distinguishing the nature of property rights,among non-state-owned enterprises,when the company's internal governance level is weak or the external institutional environment is strong,the overseas experience of executives has a significant inhibitory effect on insider trading.The contribution of this article is to conduct research based on the overseas experience of the executives,which not only enriches the research content of the executive traits,but also proves that the company's internal governance level,external institutional environment and the nature of the company's property rights inhibit the insider trading of executives with overseas experience have a significant impact.On the one hand,for the local government,it provides theoretical support for strengthening the introduction of overseas high-quality talents,improving the construction of regional judicial justice,improving the development of regional intermediary organizations,improving the institutional environment,and better playing the value of talents;on the other hand,it reminds companies to improve internal governance,senior executives must continuously enhance their own legal awareness and ethics,take the company's long-term development as the starting point for decision-making,and suppress the occurrence of insider trading.