Network Centrality and Managerial Market-Timing Ability

Abstract We document that long-run excess returns following announcements of share buyback authorizations and insider purchases are a U-shaped function firm centrality in the input–output trade-flow network. These results conform to model investors endowed with large but finite capacity for analyzing firms. Additional links weaken insiders’ informational advantage peripheral firms (simple whose cash flows depend on few economic links), provided investors’ is enough, eventually amplify central (firms many links) as result limited capacity. findings shed light sources managerial market-timing ability.