File Download

Conference Paper: Does short selling discipline overinvestment?

TitleDoes short selling discipline overinvestment?
Authors
KeywordsShort selling
Empire building
Governance
Mergers and acquisitions
Regulation SHO-PILOT Program
Issue Date2015
Citation
The 2015 China International Conference in Finance (CICF), Shenzhen, China, 9-12 July 2015. How to Cite?
AbstractWe explore the disciplining effect of short selling on overinvestment. Firms with more stock lending supply have higher abnormal announcement stock returns of acquiring firms, lower subsequent abnormal capital investments, and longer spells between large investments, and higher subsequent Tobin’s Q and ROA. Alleviating the endogeneity concern, our multivariate difference-in-difference analysis shows that this disciplinary force of lending supply is more effective for firms in the Regulation SHO-PILOT Program. We identify two mechanisms through which short selling disciplines managers: managers’ wealth-performance sensitivity and likelihood of hostile takeovers. Additionally, the disciplinary force only exists for non-financial-constrained firms and nonall-cash M&A deals.
Persistent Identifierhttp://hdl.handle.net/10722/215627

 

DC FieldValueLanguage
dc.contributor.authorChang, EC-
dc.contributor.authorLin, TC-
dc.contributor.authorMa, X-
dc.date.accessioned2015-08-21T13:33:18Z-
dc.date.available2015-08-21T13:33:18Z-
dc.date.issued2015-
dc.identifier.citationThe 2015 China International Conference in Finance (CICF), Shenzhen, China, 9-12 July 2015.-
dc.identifier.urihttp://hdl.handle.net/10722/215627-
dc.description.abstractWe explore the disciplining effect of short selling on overinvestment. Firms with more stock lending supply have higher abnormal announcement stock returns of acquiring firms, lower subsequent abnormal capital investments, and longer spells between large investments, and higher subsequent Tobin’s Q and ROA. Alleviating the endogeneity concern, our multivariate difference-in-difference analysis shows that this disciplinary force of lending supply is more effective for firms in the Regulation SHO-PILOT Program. We identify two mechanisms through which short selling disciplines managers: managers’ wealth-performance sensitivity and likelihood of hostile takeovers. Additionally, the disciplinary force only exists for non-financial-constrained firms and nonall-cash M&A deals.-
dc.languageeng-
dc.relation.ispartofChina International Conference in Finance (CICF)-
dc.relation.ispartof中國金融國際年會-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectShort selling-
dc.subjectEmpire building-
dc.subjectGovernance-
dc.subjectMergers and acquisitions-
dc.subjectRegulation SHO-PILOT Program-
dc.titleDoes short selling discipline overinvestment?-
dc.typeConference_Paper-
dc.identifier.emailChang, EC: ecchang@hku.hk-
dc.identifier.emailLin, TC: chunlin@hku.hk-
dc.identifier.emailMa, X: xrma@business.hku.hk-
dc.identifier.authorityChang, EC=rp01050-
dc.identifier.authorityLin, TC=rp01077-
dc.description.naturepostprint-
dc.identifier.hkuros249314-

Export via OAI-PMH Interface in XML Formats


OR


Export to Other Non-XML Formats