Work

When attentive insider trading matters: Evidence from government investment

Year: 2026

Type: article

Abstract: We examine whether insiders can exploit public information to increase their trading profitability. By exploiting, as a quasi‐natural experiment, the Bipartisan Infrastructure Law (BIL), announced in the U.S. in March 2021 and implemented in November 2021, we provide evidence that insiders earn higher profits when government investment plans are announced. The increased insider trading profitability is more pronounced in firms with high information asymmetry, high growth, in opportunistic trades, as well as for top executives and persistently profitable insiders. Overall, our evidence supports the attentive hypothesis that insiders earn profits by trading on public information relevant to their firms.

Source: The Journal of Financial Research

DOI: 10.1111/jfir.70042

Authors: Dimitris Petmezas, Etienne Redor, Shaoyi Wang, Nan Xiong

Institutions: Durham University, Audencia Business School

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,470