The impact of foreign ownership on the media’s role in curbing insider trading around private meetings
研究了媒体作为外部治理机制是否遏制内幕交易，并发现媒体覆盖反而与内幕交易盈利正相关，外资持股会加剧这一负面作用。
This paper investigates whether the media, as an external governance mechanism, constrains insider trading. In addition, we study two competing views of foreign ownership as an internal corporate governance mechanism – better monitoring and short-termism – by investigating the interaction effects of foreign ownership and the media on insider trading profitability. Using a unique database of private in-house meetings from 2012 to 2017, we find that media coverage is positively related to insider trading profitability, demonstrating the media’s failure as an external governance mechanism in curbing corporate insider trading. This positive relationship is stronger when foreign ownership is present, either in the form of foreign portfolio investment or foreign direct investment. Our finding that certain types of foreign investment worsen the media’s role in disciplining insider trading prompts the public to think more critically about the monitoring role of the media and foreign investment in private meetings.