Empirical Evidence on the Impact of European Insider Trading Regulations

Abstract

Between 1988 and 1994 ten European countries introduced or modified their regulations on insider trading. We evaluate in this article the impact of such regulatory changes on the risk, return, and some other characteristics of these ten markets. After extensive testing, we find that the evidence suggests that these regulations have had little (if any) impact on the market characteristics we examine, and briefly speculate about the reasons that justify our findings.