Insider Trading before Peer Firms’ M&A Announcements
Prof. Xu LI
Associate Professor of Accounting,
Associate Director, Asia Case Research Centre,
HKU EMBA Programme Director,
HKU Business School, The University of Hong Kong
Date: 5 November 2025 (Wednesday)
Time: 9:00-10:30
Venue: E22-G008
Host: Prof. LIU Nanqin, Associate Professor in Accounting
Abstract
The paper studies whether insiders leverage industrial-level information advantage for trading their own firm’s shares. We find that insiders are more likely to execute net sales before the public announcement of peer firms’ M&As when their firms share greater product similarity with the peer. The effect is stronger when the insider’s company and its peer are geographically closer and have ownership overlap. Supporting a product market-based explanation, the effect is more pronounced for horizontal M&As, and when the insider’s firm exhibits greater product market fluidity. Further analysis shows that such trades contain information about the firm’s future performance.
Speaker
Prof. Li XU is an associate professor of accounting. He obtained his Bachelor’s degree in International Business Administration from University of International Business and Economics, the Master’s degree in Finance from Boston College, and the PhD degree in accounting from Massachusetts Institute of Technology. Prior to joining University of Hong Kong, Dr. Li worked in University of Texas at Dallas and Lehigh University.
All are welcome!
