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The Determinants of Regulatory Compliance: An Analysis of Insider Trading Disclosures in Italy

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Abstract

This paper investigates the determinants of regulatory compliance in corporate organizations. Exploiting a unique enforcement and reporting framework for insider trading in Italy, we present three main findings. First, board governance, such as chief executive–chairman duality and the proportion of non-executive directors, does not increase the propensity of firms to comply with regulation. Second, family firms and firms with a high degree of separation of ownership from control are most likely to comply with regulation. Third, corporate ethos is more important in predicting regulatory compliance than explicit corporate governance structures.

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Authors and Affiliations

  1. University of Bologna, Bologna, Italy

    Emanuele Bajo, Marco Bigelli & Barbara Petracci

  2. Leeds University Business School, Leeds, U.K.

    David Hillier

Authors
  1. Emanuele Bajo
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  2. Marco Bigelli
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  3. David Hillier
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  4. Barbara Petracci
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Correspondence to David Hillier.

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Bajo, E., Bigelli, M., Hillier, D. et al. The Determinants of Regulatory Compliance: An Analysis of Insider Trading Disclosures in Italy. J Bus Ethics 90, 331–343 (2009). https://doi.org/10.1007/s10551-009-0044-x

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  • DOI: https://doi.org/10.1007/s10551-009-0044-x

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