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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 |
Publisher | Social Science Electronic Publishing, Inc.. |
Citation | The 2015 Finance Down Under (FDU) Conference, University of Melbourne, Melbourne, Australia, 5-7 March 2015. In Social Science Research Network, 2015, p. 1-54 How to Cite? |
Abstract | We explore the disciplining effect of short selling on overinvestment. Results show that firms with more stock lending supply have higher abnormal stock announcement 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 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 non-all-cash M&A deals. |
Description | Conference Theme: Building on the Best from the Cellars of Finance Parallel Sessions 1 - Overinvestment, Underinvestment, Just Right Investment |
Persistent Identifier | http://hdl.handle.net/10722/208755 |
SSRN |
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 | 2015-03-18T09:10:11Z | - |
dc.date.available | 2015-03-18T09:10:11Z | - |
dc.date.issued | 2015 | - |
dc.identifier.citation | The 2015 Finance Down Under (FDU) Conference, University of Melbourne, Melbourne, Australia, 5-7 March 2015. In Social Science Research Network, 2015, p. 1-54 | - |
dc.identifier.uri | http://hdl.handle.net/10722/208755 | - |
dc.description | Conference Theme: Building on the Best from the Cellars of Finance | - |
dc.description | Parallel Sessions 1 - Overinvestment, Underinvestment, Just Right Investment | - |
dc.description.abstract | We explore the disciplining effect of short selling on overinvestment. Results show that firms with more stock lending supply have higher abnormal stock announcement 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 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 non-all-cash M&A deals. | - |
dc.language | eng | - |
dc.publisher | Social Science Electronic Publishing, Inc.. | - |
dc.relation.ispartof | Finance Down Under (FDU) Conference 2015 | - |
dc.rights | © 2011 Social Science Electronic Publishing, Inc. All Rights Reserved. For personal & noncommercial use apply only to specific documents and use of specific SSRN-provided statistics and other information. | - |
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 | link_to_OA_fulltext | - |
dc.identifier.doi | 10.2139/ssrn.2348193 | - |
dc.identifier.hkuros | 242730 | - |
dc.identifier.spage | 1 | - |
dc.identifier.epage | 54 | - |
dc.identifier.eissn | 1556-5068 | - |
dc.publisher.place | United States | - |
dc.identifier.ssrn | 2348193 | - |
dc.identifier.issnl | 1556-5068 | - |