Manipulation, Panic Runs, and the Short Selling Ban
Research output: Conference Papers (RGC: 31A, 31B, 32, 33) › 33_Other conference paper
Author(s)
Related Research Unit(s)
Detail(s)
| Original language | English |
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| Publication status | Presented - 2 Nov 2019 |
Conference
| Title | 30th Annual Conference on Financial Economics and Accounting (CFEA 2019) |
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| Location | New York University |
| Place | United States |
| City | NYC |
| Period | 1 - 2 November 2019 |
Link(s)
| Permanent Link | https://scholars.cityu.edu.hk/en/publications/publication(f3780b75-7d39-4746-80b4-f42421ea9a2c).html |
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Abstract
This paper identifies conditions under which a short selling ban improves the ex-ante firm value. Short selling improves price discovery and enables stakeholders to make better investment decisions. However, manipulative short selling can arise as a self-fulfilling equilibrium, resulting in inefficient investment decisions. The adverse effect is amplified by the firm's vulnerability to panic runs. Overall, short selling reduces ex-ante firm value if the firm is very vulnerable to runs and the speculator's information quality is not too good. Our results contribute to understanding of the function of short selling in the capital markets and to the controversy around the regulation of short selling.
Bibliographic Note
Research Unit(s) information for this publication is provided by the author(s) concerned.
Citation Format(s)
Manipulation, Panic Runs, and the Short Selling Ban. / Gao, Pingyang; Jiang, Xu ; Lu, Jinzhi.
2019. 30th Annual Conference on Financial Economics and Accounting (CFEA 2019), NYC, New York, United States.Research output: Conference Papers (RGC: 31A, 31B, 32, 33) › 33_Other conference paper
