New Findings from Florida State University in the Area of Corporate Finance Reported (Management earnings forecasts, insider trading, and information asymmetry)
By a News Reporter-Staff News Editor at Investment Weekly News -- Researchers detail new data in Corporate Finance. According to news reporting out of Tallahassee, Florida, by VerticalNews editors, research stated, "We investigate whether senior officers use accrual-based earnings management to meet voluntary earnings disclosure (i.e., management earnings forecasts) before selling or buying their own shares when they have private information. This study is the first to use the differences in timing of trades by senior officers and other insiders (e.g., directors or large shareholders) to infer information asymmetry."
Our news journalists obtained a quote from the research from Florida State University, "We hypothesize that the timing of senior officers' trades with no other insiders' trades at the same time indicates opportunistic trades and asymmetric information between senior officers and other insiders. Our results show that senior officers' exclusive sales are negatively associated with future returns, indicating that they tend to use insider information."
According to the news editors, the research concluded: "Moreover, senior officers are more likely to meet their earnings forecasts when they plan to sell stocks."
For more information on this research see: Management earnings forecasts, insider trading, and information asymmetry. Journal of Corporate Finance, 2014;26():96-123. Journal of Corporate Finance can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Corporate Finance - www.elsevier.com/wps/product/cws_home/524467)
Our news journalists report that additional information may be obtained by contacting A. Kraft, Florida State University, Coll Business, Dept. of Finance, Tallahassee, FL 32306, United States. Additional authors for this research include B.S. Lee and K. Lopatta.
Keywords for this news article include: Florida, Tallahassee, United States, Corporate Finance, North and Central America
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