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Race inequality is well-documented in literature—certain groups, for example, African-Americans, often do not enjoy the same access to opportunities as their counterparts. Prior studies document that African-Americans are less likely to receive funding opportunities than whites and pay higher interest rates because of statistical discrimination and taste-based discrimination. However, less is known about race inequality in corporate leadership.
Professor Seyhun and his collaborators investigate racial differences in insider trading behavior by corporate leaders of S&P 1500 companies. Investigating race differences in the profitability of insider trades of these companies enables us to evaluate whether African-American corporate executives have equal access to networks that generate valuable insider information as their counterparts in similar positions.