A Dilemma of Self-interest vs. Ethical Responsibilities in Political Insider Trading

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F23%3A43922126" target="_blank" >RIV/62156489:43110/23:43922126 - isvavai.cz</a>

Výsledek na webu

<a href="https://doi.org/10.1007/s10551-022-05265-0" target="_blank" >https://doi.org/10.1007/s10551-022-05265-0</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1007/s10551-022-05265-0" target="_blank" >10.1007/s10551-022-05265-0</a>

Jazyk výsledku

angličtina

Název v původním jazyce

A Dilemma of Self-interest vs. Ethical Responsibilities in Political Insider Trading

Popis výsledku v původním jazyce

Political insider trading has brought substantial attention to ethical considerations in the academic literature. While the Stop Trading on Congressional Knowledge (STOCK) Act prohibits members of Congress and their staff from leveraging non-public information to make investment decisions, political insider trading still prevails. We discuss political ethics and social contract theory to re-engage the debate on whether political insider trading is unethical and raises the issues of conflict of interest and social distrust. Empirically, using a novel measure of information risk, we find that senator trades are associated with substantially high levels of information asymmetry. Moreover, based on inside political information, senators earn significant market-adjusted returns (4.9% over 3 months). Thus, our results do not support the prediction made by social contract theory and thereby provide a potential resolution to the ongoing debate on banning stock trading for members of Congress.

Název v anglickém jazyce

A Dilemma of Self-interest vs. Ethical Responsibilities in Political Insider Trading

Popis výsledku anglicky

Political insider trading has brought substantial attention to ethical considerations in the academic literature. While the Stop Trading on Congressional Knowledge (STOCK) Act prohibits members of Congress and their staff from leveraging non-public information to make investment decisions, political insider trading still prevails. We discuss political ethics and social contract theory to re-engage the debate on whether political insider trading is unethical and raises the issues of conflict of interest and social distrust. Empirically, using a novel measure of information risk, we find that senator trades are associated with substantially high levels of information asymmetry. Moreover, based on inside political information, senators earn significant market-adjusted returns (4.9% over 3 months). Thus, our results do not support the prediction made by social contract theory and thereby provide a potential resolution to the ongoing debate on banning stock trading for members of Congress.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50206 - Finance

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2023

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Journal of Business Ethics

ISSN

0167-4544

e-ISSN

1573-0697

Svazek periodika

187

Číslo periodika v rámci svazku

1

Stát vydavatele periodika

NL - Nizozemsko

Počet stran výsledku

31

Strana od-do

137-167

Kód UT WoS článku

000867523500001

EID výsledku v databázi Scopus

2-s2.0-85139782788