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The monitoring of short selling: Evidence from China

Citation

Deng, X and Gao, L, The monitoring of short selling: Evidence from China, Research in International Business and Finance, 43 pp. 68-78. ISSN 0275-5319 (2018) [Refereed Article]

Copyright Statement

Copyright 2017 Elsevier B.V.

DOI: doi:10.1016/j.ribaf.2017.07.087

Abstract

In the world second largest economy, the largest emerging market, an environment that is characterized by a weak legal system, a high level of government intervention, and an underdeveloped but fast evolving financial market, we investigate whether short selling is associated with regulators’ enforcement actions and reduces the future crash risk. By using manually collected firm level lawsuit data, we find that short selling is positively associated with probability for the firm of being targeted or punished by CSRC (China Securities Regulatory Commission). In addition, we find short selling reduces the future stock price crash risk. These findings suggest that short selling monitoring provides supplementary monitoring power to the financial markets. Moreover, our results provide information that can inform policy making.

Item Details

Item Type:Refereed Article
Keywords:corporate regulation, China’s enforcement actions, corporate governance, short selling, crash risk
Research Division:Commerce, Management, Tourism and Services
Research Group:Banking, Finance and Investment
Research Field:Finance
Objective Division:Commercial Services and Tourism
Objective Group:Financial Services
Objective Field:Finance Services
Author:Deng, X (Dr Xiaohu Deng)
ID Code:122193
Year Published:2018
Web of Science® Times Cited:3
Deposited By:Tasmanian School of Business and Economics
Deposited On:2017-11-04
Last Modified:2018-07-16
Downloads:0

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