Professor Zhisheng Li, the Director of the Base, has published a collaborative paper titled "Direct government intervention and insider trading" in Chinese Economic Quarterly, 2022.

Abstract:

Using 2011-2018 Chinese A-share market insiders' trading data, we investigate how the Chinese government's intervention via direct stock trading affects the trading of firm insiders. We find that interventions by the "national team" significantly increase insiders' trading returns. Strategic trading of insiders based on information advantage is the main mechanism of the effect and the impact is stronger for firms with a worse information environment. Further study indicates that the "national team" shareholdings can have a beneficial effect on stock prices at both firm level and industry level, and significantly increase the trading success rate and total profit of insiders.

Key Words: insider trading, "national team", shareholdings, strategic trading

Link: https://www.nsd.pku.edu.cn/docs/20220610163935778280.pdf

Teacher Profile

Zhisheng Li is Wenlan Distinguished Professor and doctoral supervisor of Zhongnan University of Economics and Law. He is the assistant president and the minister of Educational Affairs of Zhongnan University of Economics and Law; the director of the Innovation and Talent Base for Digital Technology and Finance Innovation, and the executive deputy director of Collaborative Innovation Center of Industrial Upgrading and Regional Finance (Hubei). His research interests include Financial Innovation, Financial Development, Financial Risk, Market Microstructure, etc. He has presided over a number of major projects of the National Social Science Fund, youth projects of the National Self-science Fund and general projects. He has published more than 50 papers in journals such as Economic Research Journal, China Economic Quarterly, Financial Research Journal, Journal of Management Science in China, Journal of Futures Markets and Pacific-Basin Finance Journal, etc.

Ling Jin is a PhD candidate at the School of Finance, Zhongnan University of Economics and Law. His research interests include Financial Development, Financial Crisis Management, and Capital Market Innovation. He has published 6 papers in Economic Research Journal, China Economic Quarterly, Journal of Management Science in China, Financial Research Journal, and Pacific-Basin Finance Journal.