Holding privileged positions within firms, insiders can acquire excessive private benefits based on their informational advantage. The bonding hypothesis suggests that this can be prevented when a firm is cross-listed on an exchange with higher regulatory and legal costs compared with its home exchange. When cross-listed insiders buy and sell shares, the returns earned are lower than in domestic firms. This difference is attributable to the increased shareholder protection in cross-listed firms that constrains the extraction of private benefits, such that when cross-listed insiders trade, they trade for non-informational reasons. © 2011 The Authors. Accounting and Finance © 2011 AFAANZ.