The legal and economic literature on insider trading can be classified into two categories: agency theories and market theories of insider trading. Agency theories of insider trading are concerned with the impact of insider trading on firm-level efficiency and firm value (Jensen and Meckling, 1976). On the other hand, insider trading market theories analyze the implications of insider trading on market performance (Bhattacharya and Daouk, 2000), such as cost of capital, liquidity and market effectiveness etc., For example, Manna (1966) suggests that insider trading allows stock markets to be more efficient. Surprisingly, most discussions about insider trading focus on US markets (Beny, 2005). La Porta et al (1998) argue that the law and its level of enforcement vary depending on countries' infrastructure, and differences in the law and its enforcement may explain variations in market structures and stock market practices across countries. different countries. Furthermore, Maug (2002) presents a mathematical model in which a dominant owner has an information advantage over small shareholders where insider trading regulations are not adequately enforced. Furthermore, Leland (1992) argues that if insider trading is permitted, stock prices reflect better information at the cost of reduced liquidity, the extent of which depends on the economic environment. Baiman and Verrecchia (1996) argue that the level of insider trading varies with the level of insider trading. financial disclosure, culture and economy of different countries. Therefore, the impact of insider trading activities on the stock market can be expected to vary from country to country. Bhattacharya and Daouk (2002) address the effect of insider trading regulation and its enforcement on the cost of capital by examining 51 countries over more than 20 years, and summarize that insider trading regulation and its application by different countries help reduce the cost of insider trading. business capital. Although the magnitude of the effect varies depending on a country's level of enforcement. Furthermore, Beny (2005) attempts to test whether insider trading law matters on ownership dispersion, stock price informativeness, and stock liquidity. The empirical results show that ownership dispersion, stock price informativeness and stock liquidity are higher where the insider trading law and its enforcement are more limited. Furthermore, the most important aspect of the formal law is the penalties or criminal sanctions imposed on those who violate the insider trading law. Fernandes and Ferreira (2009) argue that the regulation of insider trading and its enforcement improve the informativeness of stock prices, but this improvement is concentrated in developed markets.