UK DIRECTORS TRADING - THE IMPACT OF DEALINGS IN SMALLER FIRMS

This paper reassesses the UK results of significant abnormal returns f rom directors' trading for a new sample of directors' trades 1984-1986 , and finds that abnormal returns tend to be concentrated in smaller f irms. When an appropriate benchmark portfolio is used, it is found tha t the significance of the abnormal returns is substantially reduced, w ith the implication that directors' trading does not yield particularl y high profits to either the directors themselves or to an outside inv estor mimicking those trades.