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Can insider trading in US hospitality firms predict future returns?
M. Fevzi Esen1; Ming-Hsiang Chen3,4,5; Hung Wan Kot2; Manisha Singal6
2019
Source PublicationINTERNATIONAL JOURNAL OF HOSPITALITY MANAGEMENT
ISSN0278-4319
Volume83Pages:115-127
Abstract

Insider trading, defined as executives’ trading their own firm’s stocks, is often based on private and material information that has the potential to affect the firm’s future stock prices. Although trading based on information asymmetry is an important topic in finance, there is limited research on insider trading in the hospitality industry. The structure and the nature of the U.S. hospitality industry warrants exploration of this important issue. Accordingly, this study uses the event study methodology to examine 21, 785 transactions from 165 hospitality and tourism firms from 2010 to 2016. Empirical test results show that insider transactions earn abnormal stock returns, suggesting that outside investors may do well by imitating insider trades. Moreover, insider purchases are found to predict higher abnormal returns than insider sales after the event day. Following the trades of top executives and senior managers, especially those in hotels, resorts and restaurants, can be a useful strategy.
 

KeywordInsider Trading Informed Trading Abnormal Returns U.s. Hospitality Industry
DOIhttps://doi.org/10.1016/j.ijhm.2019.04.008
Indexed BySSCI ; SSCI
Language英语
WOS Research AreaSocial Sciences - Other Topics
WOS SubjectHospitality, Leisure, Sport & Tourism
WOS IDWOS:000494886300015
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Cited Times [WOS]:0   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Corresponding AuthorMing-Hsiang Chen
Affiliation1.Faculty of Tourism, Istanbul Medeniyet University, Cevizli, İstanbul, Turkey
2.Faculty of Business Administration, University of Macau, Avenida da Universidade, Taipa, Macau, China
3.Tourism and Social Administration College, NanJing XiaoZhuang University, Nanjing, 211171, China
4.School of Hospitality Business Management, Carson College of Business, Washington State University, Pullman, WA, 99164-4742, USA
5.School of Business Administration, Anhui University of Finance and Economics, Bengbu, 233030, China
6.Department of Hospitality and Tourism Management, Pamplin College of Business, Virginia Tech, 295 West Campus Drive, Blacksburg, VA, USA
Recommended Citation
GB/T 7714
M. Fevzi Esen,Ming-Hsiang Chen,Hung Wan Kot,et al. Can insider trading in US hospitality firms predict future returns?[J]. INTERNATIONAL JOURNAL OF HOSPITALITY MANAGEMENT,2019,83:115-127.
APA M. Fevzi Esen,Ming-Hsiang Chen,Hung Wan Kot,&Manisha Singal.(2019).Can insider trading in US hospitality firms predict future returns?.INTERNATIONAL JOURNAL OF HOSPITALITY MANAGEMENT,83,115-127.
MLA M. Fevzi Esen,et al."Can insider trading in US hospitality firms predict future returns?".INTERNATIONAL JOURNAL OF HOSPITALITY MANAGEMENT 83(2019):115-127.
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