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    Director networks and informed traders

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    Article available after 4/14/2018 (323.4Kb)
    Issue Date
    2016-04-14
    Author
    Akbas, Ferhat
    Meschke, Felix
    Wintoki, M. Babajide
    Publisher
    Elsevier
    Type
    Article
    Article Version
    Scholarly/refereed, author accepted manuscript
    Version
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2378655
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    Abstract
    We provide evidence that sophisticated investors like short sellers, option traders, and financial institutions are more informed when trading stocks of companies with more connected board members. For firms with large director networks, the annualized return difference between the highest and lowest quintile of informed trading ranges from 4% to 7.2% compared to the same return difference in firms with less connected directors. Sophisticated investors better predict outcomes of upcoming earnings surprises and firm-specific news sentiment for companies with more connected directors. Changes in board connectedness are positively associated with changes in measures of adverse selection.
    URI
    http://hdl.handle.net/1808/22276
    DOI
    https://doi.org/10.1016/j.jacceco.2016.03.003
    Collections
    • School of Business Scholarly Works [213]
    Citation
    Akbas, F., Meschke, F., & Wintoki, M. (2016). Director Networks and Informed Traders. Journal of Accounting and Economics, 62(1), 1-23. http://dx.doi.org/10.1016/j.jacceco.2016.03.003

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    Lawrence, KS 66045
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    Contact KU ScholarWorks
    785-864-8983
    KU Libraries
    1425 Jayhawk Blvd
    Lawrence, KS 66045
    785-864-8983

    KU Libraries
    1425 Jayhawk Blvd
    Lawrence, KS 66045
    Image Credits
     

     

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