@article{ddc7fde1b39c4a568f16cf3bda5775e6,
title = "Industry familiarity and trading: Evidence from the personal portfolios of industry insiders",
abstract = "We study whether industry familiarity is an advantage in stock trading by exploring the trading patterns of industry insiders in their own personal portfolios. To do so, we identify accounts of industry insiders in a large data set provided by a retail discount broker. We find that insiders trade firms from their own industry more frequently. Furthermore, they earn abnormal returns exclusively when trading own-industry stocks, especially obscure stocks (small, low analyst coverage, high volatility). In a battery of tests, we find no evidence of the use of private information. The results are most consistent with the interpretation that industry familiarity is an advantage in stock trading.",
keywords = "Insiders, Investor experience, Officers and directors, Retail trading",
author = "Itzhak Ben-David and Justin Birru and Andrea Rossi",
note = "Funding Information: We benefited from the comments of Ren{\'e} Stulz and Michael Weisbach. We thank Terrance Odean for providing the data. The authors appreciate comments received from participants in seminars at Case Western Reserve University, Drexel University, Georgetown University, Ohio University, The Ohio State University, the University of Cincinnati, the University of Illinois, and the U.S. Securities and Exchange Commission. Ben-David and Birru's research was supported by the Dice Center at the Fisher College of Business. Funding Information: We benefited from the comments of Ren? Stulz and Michael Weisbach. We thank Terrance Odean for providing the data. The authors appreciate comments received from participants in seminars at Case Western Reserve University, Drexel University, Georgetown University, Ohio University, The Ohio State University, the University of Cincinnati, the University of Illinois, and the U.S. Securities and Exchange Commission. Ben-David and Birru's research was supported by the Dice Center at the Fisher College of Business. Publisher Copyright: {\textcopyright} 2018 Elsevier B.V.",
year = "2019",
month = apr,
doi = "10.1016/j.jfineco.2018.08.007",
language = "English (US)",
volume = "132",
pages = "49--75",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier B.V.",
number = "1",
}