Management Trading in Chinese Entrepreneurial Firms on the ChiNext

Hu, M, Jun, X and Yang, J 2015, 'Management Trading in Chinese Entrepreneurial Firms on the ChiNext', Emerging Markets Finance and Trade, vol. 51, no. 5, pp. 33-45.

Document type: Journal Article
Collection: Journal Articles

Title Management Trading in Chinese Entrepreneurial Firms on the ChiNext
Author(s) Hu, M
Jun, X
Yang, J
Year 2015
Journal name Emerging Markets Finance and Trade
Volume number 51
Issue number 5
Start page 33
End page 45
Total pages 13
Publisher Routledge
Abstract We examine management trading in Chinese entrepreneurial firms on the ChiNext. We find that management shareholdings are considerably high, and executives tend to sell their shares after the IPOs on the ChiNext. The propensity for executives to sell shares is negatively correlated with the firms corporate governance and current operating cash flows, but the amount they sell is only positively correlated with the level of management holdings. Both the management selling decision and percentage of selling do not associate with firms earnings and sales growth. This suggests that managers are profit makers rather than informed traders in their selling activities on the ChiNext. We also find that the market reaction to management selling is substantially negative, which implies a herding effect of investors following executives to sell shares.
Subject Banking, Finance and Investment not elsewhere classified
Keyword(s) China insider
entrepreneurial firms
management trading
DOI - identifier 10.1080/1540496X.2015.1026739
Copyright notice © Taylor & Francis Group, LLC
ISSN 1540-496X
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