English, Article, Journal or magazine article edition: Insider Trading and Real Investment Luis A. Medrano

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/154598
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Insider Trading and Real Investment
Author
  • Luis A. Medrano
Physical Description
  • preprint
Notes
  • In this paper I analyze the effects of insider trading on real investment and the insurance role of financial markets. There is a single entrepreneur who, at a first stage, chooses the level of investment in a risky business. At the second stage, an asset with random payoff is issued and then the entrepreneur receives some privileged information on the likely realization of production return. At the third stage, trading occurs on the asset market, where the entrepreneur faces the aggregate demand coming from a continuum of rational uniformed traders and some noise traders. I compare the equilibrium with insider trading (when the entrepreneur trades on her inside information in the asset market) with the equilibrium in the same market without insider trading. I find that permitting insider trading tends to decrease the level of real investment. Moreover, the asset market is thinner and the entrepreneur's net supply of the asset and the hedge ratio are lower, although the asset price is more informative and volatile.
  • RePEc:upf:upfgen:149
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment