Insider trading legislation and acquisition announcements : do laws matter?

Maug, Ernst ; Halteren, Jörn van ; Ackerman, Abraham

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URL:	https://ub-madoc.bib.uni-mannheim.de/2534
Additional URL:	http://dx.doi.org/10.2139/ssrn.868708
URN:	urn:nbn:de:bsz:180-madoc-25349
Document Type:	Working paper
Year of publication:	2007
The title of a journal, publication series:	Rationalitätskonzepte, Entscheidungsverhalten und ökonomische Modellierung
Volume:	07-34
Place of publication:	Mannheim
Publication language:	English
Institution:	School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC publication series:	Sonderforschungsbereich 504 > Rationalitätskonzepte, Entscheidungsverhalten und ökonomische Modellierung (Laufzeit 1997 - 2008)
Subject:	330 Economics
Classification:	JEL: G14 G34 K22 K42 ,
Subject headings (SWD):	Insiderregeln , Fusion , Infrastruktur , Schätzung
Keywords (English):	Insider Trading , Mergers and Acquisitions , Securities Law , Law and Finance
Abstract:	In this paper we investigate how the enactment and enforcement of insider trading restrictions affect the way in which information about acquisitions is released before the actual acquisition announcement. We analyze a sample with almost 19,000 acquisition announcements from 48 countries. We find that insider trading legislation strongly affects the information revealed to the market in the runup phase before the announcement whereas the impact of subsequent enforcement actions by regulators is much weaker and mostly insignificant. The impact of insider trading legislation is stronger in countries with more effective judicial systems. We conclude that market participants rationally anticipate the degree of law enforcement.
Additional information:	Also available at SSRN [s. "Weitere URL"]