Insider trading and firm value: Evidence from Vietnam

Abstract

Although many studies have focused on evaluating factors affecting firm value, there is the lack of studies that have focused on the role of insider trading in determining of firm value in Vietnam. Therefore, this study investigates the effect of insider trading on firm value in 727 Vietnamese listed firms over the 2010 – 2021 period. The GLS regression results show that insider trading plays an important role in determining firm value. Specifically, the increase in firm value is positively associated with increased net buy trading by insiders, institutional insiders, individual insiders, and large shareholders. The results indicate that insider trading helps firms enhance value, but insider investors may intervene in firm value through stock manipulation. Therefore, policymakers must have strict regulations related to insider trading transactions and adequate sanctions for violations.