CEO and CFO Gender and Firm-Wide Insider Trading
With Karin Shields and Iain Clacher
We investigate insiders profitability under female executives using a sample of US firms between 2003 and 2011. Our results suggest a significant decrease in firm wide insider trading profitability following switches from male-to-female CEOs and CFOs. These findings are consistent to different empirical specifications, including difference-in-difference and propensity score matching. This evidence suggests female executives exhibit a relatively stronger tone-at-the-top compared with men in reducing insiders incentives to trade opportunistically.
Insider Trading Restrictions and Financial Reporting Quality
With Beatriz Garcia Osma and Karin Shields
We provide evidence that firms enjoy lower levels of earnings management following the adoption of insider trading restrictions. We base our measure of insider trading restrictions on the extent to which transactions performed by insiders take place in the “allowed” trading window, and we develop a methodology to identify the quarter when the firm has adopted the restrictive strategy. We find a significant negative relation between our insider trading restrictions measure and discretionary accruals, even after controlling for previously documented determinants of earnings management.