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University, and R. Ravichandran of Northern Arizona University for helpful comments on earlier versions of this paper. Other comments are welcome. We examine the profitability of insider trading in Hong Kong between 1993 and 1997. On average, firms in Hong Kong have very concentrated ownership and insiders trade more actively and account for larger fractions of total turnover of their firms ’ shares than do US insiders. Inside sellers in Hong Kong earn negligible rents; however, inside buyers earn statistically and economically significant positive mean abnormal returns. Inside buyers ’ abnormal returns are especially large for firms in consolidated industries. We argue that such firms are less transparent than firms that operate in more focused businesses and, consequently, that shares of these firms are more likely to provide opportunities for insiders to trade based on privileged information. 1 Shleifer and Vishny’s notion of concentrated ownership is not limited to common shareholders. Large creditors can also force managers to return cash to investors.