Purpose We investigate whether corporate site visits (CSVs) facilitate insider trading by serving as a bidirectional information channel, whereby insiders may time trades around visit-related information and alter their information sets and trading incentives based on visitors' industry assessments, peer comparisons, and market feedback. Design/methodology/approach Using a sample of Shenzhen Stock Exchange-listed firms from July 2012 to December 2023, we match CSV records with insider trading filings to construct a firm-year panel. We calculate annual visit frequency and aggregate insider trading frequency and volume within −20, +20 trading-day windows around each visit to the corresponding firm-year. We then estimate panel regressions with firm and year fixed effects, supplemented by tests based on disclosure timeliness, alternative event windows, and an instrumental-variable specification. Findings Firms receiving more CSVs exhibit significantly higher insider trading activity, particularly in sell-side trades. A one-standard-deviation increase in the annual frequency of corporate site visits is associated with approximately 0.65 and 0.45 standard-deviation increases in insider trading frequency and volume, respectively. Timely disclosure of visit summaries weakens this relationship. Insider trades around CSVs generate positive subsequent abnormal returns, consistent with the value relevance of information acquired through visits. Originality/value This study identifies CSVs as a novel channel through which insiders gain value-relevant private or less-diffused information, extending insider trading literature beyond traditional firm-specific events. It also reveals a negative externality of CSVs—unintentionally promoting insider trading—and highlights the moderating role of disclosure timeliness in mitigating informational advantages.
Wang et al. (Thu,) studied this question.