The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Tue, 14 Jul 2026 11:32:05 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Insider Trading in Takeover Targets – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Insider Trading in Takeover Targets https://corpgov.law.harvard.edu/2012/04/02/insider-trading-in-takeover-targets/?utm_source=rss&utm_medium=rss&utm_campaign=insider-trading-in-takeover-targets https://corpgov.law.harvard.edu/2012/04/02/insider-trading-in-takeover-targets/#comments Mon, 02 Apr 2012 13:33:16 +0000 http://blogs.law.harvard.edu/corpgov/?p=27111?d=20150105134821EST Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Monday, April 2, 2012
Editor's Note:

The following post comes to us from Anup Agrawal, Professor of Finance at the University of Alabama, and Tareque Nasser of the Department of Finance at Kansas State University.

In our paper, Insider Trading in Takeover Targets, forthcoming in the Journal of Corporate Finance, we provide systematic evidence on the level, pattern and prevalence of trading by registered insiders before announcements of takeovers during modern times. We examine insider trading in about 3,700 targets of takeovers announced during 1988-2006 and in a control sample of non-targets, both during an ‘informed’ and a control period. We analyze open-market stock transactions of five groups of corporate insiders: top management, top financial officers, all corporate officers, board members, and large blockholders. We separately examine their purchases, sales and net purchases in target and control firms during the one year period prior to takeover announcement (informed period) and the preceding one year (control) period, using a difference in differences (DID) approach. Using several measures of the level of insider trading, we estimate cross-sectional regressions that control for other determinants of the level of insider trading.

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