for research assistance. I am especially grateful to Andrei Shleifer for guidance through the many stages of the larger project and to Peter Henry and Daria Roithmayr for their warm, collegial guidance. I gratefully acknowledge financial support from the John M. Olin Center for Law, Economics and Business at Harvard Law School, the John M. Olin Center for Law and Economics at Michigan Law School, and the Cook Fund of the University of Michigan Law School. I will be forever indebted to Donald J. Brown for illuminating my path. This article is based on an earlier article, "A Comparative Empirical Investigation of Agency and Market Theories of Insider Trading," John M.

The paper summarizes various agency cost and market theories of insider trading propounded over the course of the perennial law and economics debate over insider trading. The paper then suggests three testable hypotheses regarding the relationship between insider trading laws and several measures of financial performance. Using international data and alternative regression specifications, the paper finds that more stringent insider trading laws and enforcement are generally associated with greater ownership dispersion, greater stock price accuracy and greater stock market liquidity. This set of findings provides empirical support to theoretical arguments in favor of more stringent insider trading legislation and enforcement.

No abstract

for research assistance. I am especially grateful to Andrei Shleifer for guidance through the many stages of the larger project and to Peter Henry and Daria Roithmayr for their warm, collegial guidance. I gratefully acknowledge financial support from the John M. Olin Center for Law, Economics and Business at Harvard Law School, the John M. Olin Center for Law and Economics at Michigan Law School, and the Cook Fund of the University of Michigan Law School. I will be forever indebted to Donald J. Brown for illuminating my path. This article is based on an earlier article, "A Comparative Empirical Investigation of Agency and Market Theories of Insider Trading," John M.

No abstract