Funding Scheme

RGC Faculty Development Scheme

Project Title

Do Insiders Exploit the Market Expectation Errors in Value/Growth Stocks?

Project Team (HSMC Staff) 

Dr Jeff SHEN, Department of Economics & Finance (PI)

Other Collaborating Parties

Fordham University

Project Period

1-1-2019 to 31-12-2020 (on-going)

Funding Amount (HKD)

745,300

Abstract

This study will yield several policy implications for regulators of insider trading. Insiders’ exploitation of expectation errors may drive stock prices back to fundamentals, which improves market efficiency in some sense. However, the role of information disclosure in insider trades is less important in firms with transparent environments. The insider trading is less likely to appear when the information is quickly impounded into stock price. The Hong Kong stock market is growing year by year, attracting investors from around the world. The proposed research will shed light on insider trading patterns and give suggestions on policies for reducing insider trading.