Impact of macroeconomic policy uncertainty on opportunistic insider trading

The macroeconomic policy environment affects the internal governance of microenterprises, which may provide opportunities for management to benefit from stock sales while decreasing its motivation to manipulate stock transactions. Using a sample of Chinese A-share listed companies from 2007 to 2018, we study the impact of macroeconomic policy uncertainty on opportunistic insider trading. The results show that macroeconomic policy uncertainty helps restrain the opportunistic trading of shares held by management. When macroeconomic policies are uncertain, enterprises improve their internal governance. Furthermore, strengthening equity governance helps reduce management's opportunistic use of the uncertainty of the policy environment, highlighting the advantageous effect of macroeconomic policy uncertainty and helping regulators standardize managerial behavior and promote the governance effect of macroeconomic policy.