The impact of short-selling pressure on corporate employee relations

Paul Brockman, Juan Luo and Limin Xu

Journal of Corporate Finance, 2020, vol. 64, issue C

Abstract: We show that randomly-selected Regulation SHO pilot firms respond to an increased threat of short selling by significantly improving their employee relations. Pilot firms enhance employee security to reduce the likelihood of employee-related negative publicity. The reduction of workplace concerns is most evident among pilot firms with higher degree of earnings manipulation, short interest potential, likelihood of labor disputes and employee whistle-blowing. Pilot firms experience better stock performance during the post Reg-SHO period after easing workplace concerns. Overall, our study provides novel evidence that the removal of short-selling constraints has a real effect on labor relations.

Keywords: Employee relations; Labor disputes; Short-selling; Regulation SHO (search for similar items in EconPapers)
JEL-codes: G14 G32 J24 M51 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:64:y:2020:i:c:s0929119920301218

DOI: 10.1016/j.jcorpfin.2020.101677

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