This study extends prior research that explores managerial foresight and firm value and performance through insider trading. We investigate whether insider trading can signal the value of a firm’s competitive behavior. Specifically, we argue and find support that insider trading in the prior year is positively related to competitive behavior attributes of competitive complexity and nonconformity in the current year, and that dispersion of analysts’ forecasts weakens these relationships. Interestingly though, we find no support for the relationship between insider trading and competitive intensity. Overall, we demonstrate that managers can exploit their foresight on the performance outcomes of certain attributes of their firm’s competitive behavior through insider trading.
