文献详情
Does short selling affect a firm's financial constraints?
文献类型：期刊
通讯作者：Li, XY (reprint author), Renmin Univ China, Sch Business, Beijing 100872, Peoples R China.
期刊名称：JOURNAL OF CORPORATE FINANCE
年：2020
卷：60
ISSN：0929-1199
关键词：Short sales; Financial constraints; The negative information effect
所属部门：商学院
摘要：Using a sample of Chinese A-share listed firms from 2007-2017, we examine the impact of short sales on a firm's financial constraints. We develop three conceptual frameworks, the negative information effect, the undervaluation effect, and the deterrent effect, based on the prevailing theories and conduct an in-depth empirical analysis using the difference-in-differences, propensity score matching, and instrumental variable methods. Our findings suggest that: (1) Short sales generally worsen a fi ...More
Using a sample of Chinese A-share listed firms from 2007-2017, we examine the impact of short sales on a firm's financial constraints. We develop three conceptual frameworks, the negative information effect, the undervaluation effect, and the deterrent effect, based on the prevailing theories and conduct an in-depth empirical analysis using the difference-in-differences, propensity score matching, and instrumental variable methods. Our findings suggest that: (1) Short sales generally worsen a firm's financial constraints by reducing its ability of raising cheap and overvalued external capital. (2) A shortable firm's financial constraints deteriorate more seriously in the case of higher credit risk or information asymmetry. (3) When a firm becomes shortable, its negative media coverage increases, external financing cost rises, and the amount of new external financing decreases. (4) The adverse impact of short sales on financial constraints is more pronounced for inefficient state-owned firms and mainly concentrates in the short term. Collectively, these results support the underlying logic of the negative information effect. However, further analysis shows that: (1) The deterrent effect also exists but is much weaker than the negative information effect. (2) The strength of the two effects will "wan and wax" with time or circumstances. Thus, the deterrent effect may outweigh the negative information effect by easing a firm's financial constraints in some cases, such as in the long term after short sales deregulation and when short sales magnitude is low or the managers are more sensitive to the decline of stock price. Our paper provides new insights into the impact of shorts sales on financial constraints, revealing some unique Chinese features compared to the US market and offering valuable lessons to other emerging markets. ...Hide

DOI：10.1016/j.jcorpfin.2019.101531
百度学术：Does short selling affect a firm's financial constraints?
语言：外文
人气指数：4
浏览次数：4
基金：National Natural Science Foundation of ChinaNational Natural Science Foundation of China [71572009, 71872010]; Foundation of Youth for Humanity and Social Sciences from the Ministry of Education of ChinaMinistry of Education, China [16YJC630024]; Beijing Social Science Fund [16GLC051]; Fundamental Research Funds for Central UniversitiesFundamental Research Funds for the Central Universities [2019JT004, 2019JBM403]
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