Short Selling and Information Quality: Evidence from Natural Experiments in an Emerging Market

2022 ◽  
pp. 1-17
Author(s):  
Huan Lin ◽  
Yu Chen ◽  
Chao He
Keyword(s):  
Information Quality ◽  
Emerging Market ◽  
Short Selling ◽  
Natural Experiments ◽  
Quality Evidence

Impact of short selling activity on market dynamics: Evidence from an emerging market

2014 ◽  
Vol 15 ◽  
pp. 53-62 ◽  
Author(s):  
Cihat Sobaci ◽  
Ahmet Sensoy ◽  
Mutahhar Erturk
Keyword(s):  
Emerging Market ◽  
Short Selling ◽  
Market Dynamics

Short-sale refinancing and earnings response coefficient: evidence from China

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tingli Liu ◽  
Ying Jiang ◽  
Lizhong Hao
Keyword(s):  
Corporate Governance ◽  
Property Rights ◽  
Emerging Market ◽  
Earnings Quality ◽  
Sample Selection ◽  
Short Selling ◽  
Content Type ◽  
Short Sale ◽  
Earnings Response ◽  
The Impact

Purpose Although short selling has been legalized in China for nearly 10 years, due to the existence of short-sale constraints, its impact on corporate governance of listed companies remains unclear. This paper aims to examine the impact of short-sale refinancing on earnings quality after the short-selling constraints have been released. The authors further explore whether this impact is subject to the nature of property rights and shareholding structures. Design/methodology/approach This study is based on a sample of A-share firms in China for the period 2014–2016. The authors use earnings response coefficients (ERC) as a proxy for earnings quality. To empirically examine this issue, a matching sample is generated by using propensity score matching method (PSM) to reduce sample selection bias. Findings This study provides evidence that deregulation of short selling has positive external effect on corporate governance. The results indicate that the potential short-selling opportunities can effectively suppress earnings manipulation and improve earnings quality. However, the impact of short selling on earnings quality varies for companies with different nature of property rights and shareholding structure. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the relationship between short selling and earnings quality in the unique setting of short-sale refinancing. This study provides new evidence on the impact of short selling at the micro level and calls for further deregulation of short selling. In addition, this study contributes to existing studies on short-sale refinancing by examining an emerging market.

The unintended real effects of short selling in an emerging market

2020 ◽  
Vol 64 ◽  
pp. 101659 ◽  
Author(s):  
Xiaoran Ni ◽  
Sirui Yin
Keyword(s):  
Emerging Market ◽  
Short Selling ◽  
Real Effects
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