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Abstract This study investigates the large A-shareholders'selling behavior using the disclosed trading data before February 29,2008 . We find that large shareholders make use of private information about company's fundamental value and future performance in their selling decision . The companies which have higher valuation,worse prospect and larger price fluctuation risk will be sold more aggressively by large shareholders .By analyzing the selling quantity,we find that large sales are mainly made due to valuation and performance reasons,while small sales are provoked mainly by high price fluctuation risk . In terms of the insider identity,sales by controlling shareholders convey negative signals more definitely than sales by other large shareholders . The results can not only improve our understanding about large shareholders'trading behavior,but also have important implications for regulation and investor decision .
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Received: 25 March 2009
Published: 04 June 2009
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