Common Institutional Ownership and Insiders' Stock Selling
The market volatility and wealth transfer resulting from insiders'stock selling have increasingly emerged as a prominent subject of societal concern.The key issue lies in suppressing insiders'motivation to reduce their holdings at the source and restricting their stock selling behavior,which is crucial for promoting a healthy and orderly operation of the capital market.This paper investigates the impact of common institutional ownership on insiders'stock selling,uti-lizing data from Shanghai and Shenzhen A-share listed companies spanning the period 2007 to 2022.Firstly,the re-search results show that common institutional ownership can restrain insiders'stock selling,and the higher the degree of linkage formed by common institutional ownership,the stronger the constraint on insiders'stock selling,and the im-pact is still significant after taking into account missing variables,mutual causality,selection bias and other problems.Secondly,mechanism analysis shows that common institutional ownership weakens the motivation of insiders to reduce their holdings through supervision and governance effects and information transmission effects,and then constrains the behavior of insiders to reduce their holdings.Thirdly,the restraint effect of common institutional ownership on insiders'stock selling becomes more obvious when the management is short-sighted,the enterprise faces heightened uncertainty,or the market experiences a bearish trend.From the perspective of common institutional ownership,this paper explores the impact of this model on corporate governance,information transmission and insiders'stock selling.This analysis contributes to the existing literature on the economic consequences of common institutional ownership and insiders'stock selling arbitrage,providing valuable insights for mitigating the adverse effects of insiders'stock selling on the cap-ital market.
common institutional ownershipinsiders' stock sellingsupervision and governancetransmission of infor-mation
万方数据
维普
