Some Remarks on Leland's Model of Insider Trading
Bibliographic Data
| ID | 9724627 |
|---|---|
| Authors | Rafael Repullo (Center for Economic and Policy Research, corresponding author) |
| Year | 1999 |
| Volume | 66 |
| Issue | 263 |
| Pages | 359-374 |
| Publication date | 1999-08-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/1468-0335.00175 |
| OpenAlex | W2094954365 |
| Language | EN |
| References cited | 2 |
This paper shows that Leland's (1992) results on the positive effects of insider trading on investment are not robust to the introduction of noise in the insider’s information. The paper then considers two variations of his model in which the insider is risk neutral (to ensure robustness), and the investment decision is prior to the placing of the stock in the market. It is shown that if insider trading takes place in the primary market, it has no effect on the level of investment, whereas if it takes place in the secondary market, it has a negative effect on investment
Business · Economics · Financial economics · Insider · Insider trading · Investment (military) · Monetary economics · Robustness (evolution) · Stock market · Auditing, Earnings Management, Governance · Corporate Finance and Governance · Finance · Financial Markets and Investment Strategies · Law
| Citation velocity | historical |
|---|---|
| Highly cited | No |