Insider Trading in News Deserts
研究发现地方报纸停刊后，当地企业内幕交易获利增加，尤其在缺乏替代新闻来源的小公司中，说明地方新闻能缓解内幕人与外部人的信息不对称。
ABSTRACT This study examines the informational value of local news outlets and how they affect insider trading. We hypothesize that local news coverage is a critical channel through which outsiders acquire local information, which restricts insiders’ ability to profit from their information advantage. We argue that a loss of local news coverage increases information opacity faced by outsiders, while making it easier for insiders to seize profitable trading opportunities. Exploring the staggered shutdown of local newspapers, our difference-in-differences estimation presents novel evidence that insiders from closure counties trade more profitably after local newspaper closures, particularly in small firms that lack alternative news sources. Further analyses reaffirm that the post-closure increase in trading profits is unlikely to be wholly driven by regional economic conditions and is likely driven by increased information costs. Our results highlight that local newspapers play a meaningful role in mitigating information asymmetry between insiders and outsiders. Data Availability: Data used in this study are available from the sources identified in the paper. JEL Classifications: G14; G30; L82.