Media Background Executives and Insider Trading Gains:Collusion or Effective Supervision
The media is an important force for firms'external monitoring.The employment of media-background executives by companies may either monitor and constrain insider trading or make it easier for firms to manipulate the media and promote opportunistic behavior.This paper examines the rela-tionship between media-background executives and insider trading gains in a sample of Chinese A-share listed companies from 2009 to 2021.Empirical findings show that the company's hiring of media-background executives significantly reduces excess returns from insider trading.Mechanism analysis indi-cates that media-background executives primarily lower insider trading profits by increasing abnormal investor attention and alleviating information asym-metry.Further analysis reveals that younger,less educated insiders,and non-independent directors are more influenced by media-background executives.Additionally,corporate equity balance and regional legal development serve as complementary governance mechanisms to media-background executives.Moreover,the lower the information disclosure rating of a company in the previous year,the stronger the governance function of media-background execu-tives.The findings of the study are of practical significance for utilizing the media monitoring effect,improving the construction of the executive team,as well as protecting investors'interests and promoting the healthy development of the capital market.
万方数据
维普
