Business, Government, and the Information Environment: Stock Trading and Earnings Shocks in China, Indonesia, and Singapore

Warren Bailey

Yuan Gao


Connie X. Mao

We examine stock market behavior around earnings announcements in three countries with different degrees of government involvement with corporations. We find evidence consistent with insider trading in shares of politically connected Indonesian companies. We find little comparable evidence for Singapore. For China, government regulation appears associated with insider trading. Thus, national economic, legal, and regulatory characteristics seem to affect the information environment in capital markets.

Key Words: Information environment; Disclosure; Emerging markets; Corruption.
JEL Classification Numbers: G14, G15, G38.