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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/25994
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| Title: | What Do Independent Directors Know? Evidence from Their Trading |
| Authors: | Ravina, Enrichetta
Sapienza, Paola |
| Issue Date: | Dec-2006 |
| Series/Report no.: | CLB-06-021 |
| Abstract: | We compare the trading performance of independent directors and other
officers of the firm. We find that independent directors earn positive
and substantial abnormal returns when they purchase their company stock,
and that the difference with the same firm’s officers is
relatively small at most horizons. The results are robust to controlling
for firm fixed effects and to using a variety of alternative
specifications. Executive officers and independent directors make
higher returns in firms with weaker governance and the gap between these
two groups widens in such firms. Independent directors who sit in audit
committees earn higher return than other indepen- dent directors at the
same firm. Finally, independent directors earn significantly higher
returns than the market when they sell the company stock in a window
before bad news and around arestatement announcement. |
| URI: | http://hdl.handle.net/2451/25994 |
| Appears in Collections: | NYU Pollack Center for Law & Business Working Papers
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