Institutional Investor Cliques Information Dissemination, and the Value of Information: Evidence from Insider Trading

I analyze the relationship between insider trading outcomes and insiders' information environment within a network. While most existing studies rely on one dimension of commonality (e.g., personal ties, professional ties, geographic proximity) to construct the social network, I document the formation of the institutional investor groups (cliques) that exogenously connect firm-level insiders within the social network. Using difference-in-differences designs examining changes in clique size, I provide empirical evidence on the information dissemination channels within a network in which its members are quasi-randomly selected. Insider transactions in larger cliques exhibit lower abnormal trading profits, higher level of trading frequency, and larger amount of trade size, suggesting information dissemination is increasing in clique size. Then, I provide empirical evidence that the association between the value of information and the information dissemination rate is monotonic, consistent with prior theoretical studies.

Name thesis:degree_name

Doctor of Philosophy

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Business, Accounting and Information Systems

Department dc:contributor.department

Business, Accounting and Information Systems

Grantor dc:publisher

Virginia Tech

Year dc:date.issued

2023

Author dc:creator

• Zhang, Zhenyu

Chair dc:contributor.committeechair

• Davidson, Robert H.

Committee members dc:contributor.committeemember

• Lisic, Ling Lei
• Tan, Liang
• Lowry, Michelle Rene

• insider trading
• inside information
• social network
• institutional ownership

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Language dc:language.iso

en

Dc Identifier Other

vt_gsexam:36846

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/114587