Paper: SSRN 249708

Abstract

The existence and the enforcement of insider trading laws in stock markets is a phenomenon of the 1990s. A study of the 103 countries that have stock markets re

Complexity vs Empirical Score

  • Math Complexity: 2.5/10
  • Empirical Rigor: 8.0/10
  • Quadrant: Street Traders — practical and empirical, lighter on theory

Why this score: The paper relies on descriptive statistics, international asset pricing factor models, and regressions with country-level controls, which involve standard empirical finance methods rather than advanced mathematics. However, it demonstrates high empirical rigor by compiling a comprehensive dataset from 103 countries, using multiple econometric approaches to address the research question, and focusing on measurable outcomes like cost of equity.

Research Flowchart

  flowchart TD
  A["Research Goal<br>What is the world price of<br>insider trading laws?"] --> B["Methodology<br>Econometric analysis of 103 countries"]
  B --> C["Data Inputs<br>Stock market returns<br>Enforcement indicators"]
  C --> D["Computational Process<br>Regression analysis of market efficiency"]
  D --> E["Key Findings<br>Insider trading laws increase<br>market liquidity and efficiency"]
  E --> F["Outcome<br>Stronger legal enforcement<br>improves equity markets"]