Ethics, Social Responsibility, and Inside Trading

. . . [E]xecutives of socially responsible firms make significantly lower profits from their insider trades. This inference is robust to a battery of sensitivity tests. We further find that executives of socially responsible firms are less likely to trade on future corporate news events. Our results are consistent with executives of socially responsible firms having higher ethical standards than other executives.

Source: Gao, Lei Lisic and, Zhang (September 2012).