Political connections and informed trading: evidence from TARP

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• dc.contributor.author Akın, Özlem
• dc.contributor.author Coleman, Nicholas S.
• dc.contributor.author Fons‐Rosen, Christian
• dc.contributor.author Peydró, José-Luis
• dc.date.accessioned 2019-12-18T11:39:13Z
• dc.date.issued 2021
• dc.description.abstract We study insider trading behavior surrounding the largest bank bailout in history: TARP. In politically‐connected banks, insider buying during the pre‐TARP period is associated with increases in abnormal returns around bank‐specific TARP announcement; for unconnected banks, trading and returns are uncorrelated. Results hold across insiders within the same bank and are stronger for finance‐related government connections. Through a FOIA request we obtained the previously undisclosed TARP funds requested; the ratio of received to requested funds correlates both with abnormal returns and insider buying behavior in connected banks.
• dc.description.sponsorship Christian Fons‐Rosen acknowledges financial support by the Spanish Ministry of Economy and Competitiveness (ECO2014–55555–P).José‐Luis Peydró acknowledges financial support from both ECO2015‐68182‐P (MINECO/FEDER, UE) and the European Research Council Grant (project 648398).
• dc.format.mimetype application/pdf
• dc.identifier.citation Akin O, Coleman NS, Fons‐Rosen C, Peydró J‐L. Political connections and informed trading: evidence from TARP. Financ Manage. 2021;50(3):619-44. DOI: 10.1111/fima.12292
• dc.identifier.doi http://dx.doi.org/10.1111/fima.12292
• dc.identifier.issn 0046-3892
• dc.identifier.uri http://hdl.handle.net/10230/43201
• dc.language.iso eng
• dc.publisher Wiley
• dc.relation.ispartof Financ Manage. 2021;50(3):619-44. DOI: 10.1111/fima.12292
• dc.relation.projectID info:eu-repo/grantAgreement/EC/H2020/648398
• dc.relation.projectID info:eu-repo/grantAgreement/ES/1PE/ECO2014-55555-P
• dc.relation.projectID info:eu-repo/grantAgreement/ES/1PE/ECO2015-68182-P
• dc.rights © 2019 The Authors. Financial Management published by Wiley Periodicals LLC on behalf of Financial Management Association International. This is an open access article under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by/4.0/
• dc.subject.keyword Political connections
• dc.subject.keyword Political economy in banking
• dc.subject.keyword Insider trading
• dc.subject.keyword TARP
• dc.subject.keyword Bank bailouts
• dc.title Political connections and informed trading: evidence from TARP
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/publishedVersion