| The Effect of Market Abuse Regulation on Analysts’ Information Production Activities
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Suji Cho, Cheol-Won Yang |
| 시장질서교란행위 규제가 애널리스트 정보 생성에 미치는 영향 |
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조수지, 양철원 |
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단국대학교 |
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| Abstract |
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This study examines the effects of the regulation on market abuse on analysts’ information generation activities under the Capital Market Act of July 2015. The new market abuse act has drastically expanded the extent and scope of insider information and the scope of insider trading prohibition provisions. In addition, analysts may be the most sensitive market participants in the regulation of market abuse as the most dominant actor in information generation in capital markets. As a result of the empirical analysis, we find that EPS (earnings per share) forecast errors increase significantly after the regulation. These changes are significant even after controlling the number of analysts, stock price volatility, and trading volume. This phenomenon is mainly found in firms with small and medium size and companies with high prediction accuracy before implementation. We also find that analysts’ forecast errors significantly increase after the law enforcement on Hanmi’s case in late 2016. The results of this study suggest that institutional change has a significant effect on the information production activities of capital markets. |
| Key Words:
시장질서교란행위,내부자 거래,애널리스트,정보생성,예측오차,Market Abuse,Insider Trading,Analyst,Information Generation,Forecast Error |
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