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Conference Paper: Does short selling discipline overinvestment?
Title | Does short selling discipline overinvestment? |
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Authors | |
Keywords | Short selling Empire building Governance Mergers and acquisitions Regulation SHO-PILOT Program |
Issue Date | 2015 |
Citation | The 2015 China International Conference in Finance (CICF), Shenzhen, China, 9-12 July 2015. How to Cite? |
Abstract | We 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 Identifier | http://hdl.handle.net/10722/215627 |
DC Field | Value | Language |
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dc.contributor.author | Chang, EC | - |
dc.contributor.author | Lin, TC | - |
dc.contributor.author | Ma, X | - |
dc.date.accessioned | 2015-08-21T13:33:18Z | - |
dc.date.available | 2015-08-21T13:33:18Z | - |
dc.date.issued | 2015 | - |
dc.identifier.citation | The 2015 China International Conference in Finance (CICF), Shenzhen, China, 9-12 July 2015. | - |
dc.identifier.uri | http://hdl.handle.net/10722/215627 | - |
dc.description.abstract | We 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.language | eng | - |
dc.relation.ispartof | China International Conference in Finance (CICF) | - |
dc.relation.ispartof | 中國金融國際年會 | - |
dc.subject | Short selling | - |
dc.subject | Empire building | - |
dc.subject | Governance | - |
dc.subject | Mergers and acquisitions | - |
dc.subject | Regulation SHO-PILOT Program | - |
dc.title | Does short selling discipline overinvestment? | - |
dc.type | Conference_Paper | - |
dc.identifier.email | Chang, EC: ecchang@hku.hk | - |
dc.identifier.email | Lin, TC: chunlin@hku.hk | - |
dc.identifier.email | Ma, X: xrma@business.hku.hk | - |
dc.identifier.authority | Chang, EC=rp01050 | - |
dc.identifier.authority | Lin, TC=rp01077 | - |
dc.description.nature | postprint | - |
dc.identifier.hkuros | 249314 | - |