Abstract:

This article aims at highlighting the information asymmetry existing between the managers and the investors. Our study covers a sample consisting of 124 French firms listed on the SBF 250 index between the years 1999 and 2008. We show, through the use of Generalized Least Square technique, that the trading volume, the volatility of stock returns, the insiders’ trading and the stock price were significantly correlated with the information asymmetry. These results are consistent with the market microstructure theory.