TY - JOUR
T1 - Insider Trading and Innovation
AU - ROSS, Levine
AU - LIN, Chen
AU - WEI, Lai
PY - 2017/11
Y1 - 2017/11
N2 - We assess whether restrictions on insider trading accelerate or slow technological innovation. Using over 80,000 industry-country-year observations across 74 economies from 1976 to 2006, we find that enforcing insider-trading laws spurs innovation—as measured by patent intensity, scope, impact, generality, and originality. Furthermore, the evidence is consistent with the view that restricting insider trading accelerates innovation by improving the valuation of, and increasing the flow of equity financing to, innovative activities.
AB - We assess whether restrictions on insider trading accelerate or slow technological innovation. Using over 80,000 industry-country-year observations across 74 economies from 1976 to 2006, we find that enforcing insider-trading laws spurs innovation—as measured by patent intensity, scope, impact, generality, and originality. Furthermore, the evidence is consistent with the view that restricting insider trading accelerates innovation by improving the valuation of, and increasing the flow of equity financing to, innovative activities.
UR - http://www.scopus.com/inward/record.url?scp=85047542566&partnerID=8YFLogxK
U2 - 10.1086/696384
DO - 10.1086/696384
M3 - Journal Article (refereed)
SN - 0022-2186
VL - 60
SP - 749
EP - 800
JO - Journal of Law and Economics
JF - Journal of Law and Economics
IS - 4
ER -