내부자거래가 기업신용등급 평가에 미치는 영향

Abstract

This study examines the relationship between insider trading and credit rating. In this paper, we examine whether insider trading is perceived by credit rating firms as a means to provide information related to the future performance of the company or to pursue the interests of insiders. On the positive side, insider trading can deliver information about the quality of earnings or future performance of the company to the market (Beneish and Vargus 2002; Ke et al. 2003). In other words, insider trading can provide positive information on external investors and capital markets by mitigating the information asymmetry between the manager and the investor by conveying the information about the company’s economic substance or internal information of the manager to the market. An insider’s purchase transaction means that the future management performance is good, and the insider’s sale transaction can inform the external information users that the future management performance is not good. On the other hand, managers who are planning insider trading as a negative aspect of insider trading are reported to pursue their profits by using information asymmetry between insiders and external information users, using profit adjustment before insider trading, and obtaining excess returns. Managers use opportunistic use of profits or disclosures by adjusting (lowering) profits before selling (buying) shares or by increasing (decreasing) disclosures of good (Park and Park 2004; Kim et al. 2010; Kim et al. 2014). Previous studies have reported that managers are opportunistically using them to pursue their private interests. Recent media reports also report that insider trading is being used as a means of pursuing their own interests. The Financial Services Agency reported that Hanjin Shipping sold 967,927 shares (0.39%) of Hanjin Shipping Co., which had been held by its owner right before the announcement of the autonomous agreement to take care of themselves through insider trading (Korean economy, April 29, 2016). In addition, the financial authorities investigated the Tongyang Group’s insolvency, which revealed that Tong Yang Group executives had sold stocks that were held immediately after the application for court receivership. Samsung Techwin former and current executives also found out that the company had previously bought and sold stocks of information that the company would be sold to the Hanwha Group(Korea Economy August 12, 2015). Kim and Shin (2014) pointed out that 67.15% of Korean companies are doing insider trading and that they are getting excess profits, suggesting that stock trading using insider’s private data is implicit. This study investigates how credit rating firms respond to the characteristics of insider trading. If insider trading is perceived as a means of providing private information related to a company’s future management performance, credit rating firms will respond differentially to buying and selling transactions, or else insider trading is a means to pursue the interests of insiders , credit rating evaluation will be decreased regardless of the type of insider trading. As a result of analyzing the non-financial companies among the listed companies from 2008 to 2012 as a sample, the results of the empirical analyses show that both insider buying and selling transactions decrease credit rating, which means that insider transactions are perceived as insider opportunistic factors. Insider buying has a significant decline in corporate credit ratings, and selling also lowers credit ratings. In other words, credit rating firms recognize insider trading as profit adjustment and opportunistic factor due to information asymmetry, which means insider trading is a factor that decreases credit rating. In addition, insider buying and selling transactions incrementally decrease credit rating when the information asymmetry is high or a default risk is high. This implies that credit rating is decreased because credit rating firms have the difficulty in predicting future management performance due to the information risk associated with insider trading, the low reliability of financial information. The results of this study provide an incremental contribution among the positive or negative aspects of insider trading. In order to secure the robustness of the research results, the hypothesis is tested by the high and low information asymmetry and by the high and low risks of corporate failure, which is an additional contribution to the existing research results that presented contradictory results for insider trading. In addition, considering the fact that there is a difference in information power among the executives, only the insider trading of the CEO is analyzed and the same result is presented. The results of this study consistently show that insider trading of domestic companies is carried out to obtain the transaction profit, not the purpose of information transfer, by supporting the motivation of insider trading for private profit. The results of this study are expected to provide useful implications, especially to investors and financial authorities. Despite these contributions, this study has the following limitations. Credit ratings are measured at the discretion of the credit rating agency and may not be a direct reflection of the decision-making process of creditors. In the future, it will be meaningful to verify the relationship with the insider trading using the yield spread of the corporate bond which is directly reflected in the decisions of creditors.