The real impacts of public short campaigns: Evidence from stakeholders

Claire Liu, Angie Low and Talis Putnins

Journal of Corporate Finance, 2024, vol. 88, issue C

Abstract: Using a novel dataset of firm product introductions, we examine whether public short campaigns (PSCs) have real impacts on targets. Targets introduce fewer new products and experience declines in productivity and product quality relative to matched firms following PSCs. These declines in product outcomes are partly attributed to the withdrawal of support from key stakeholders, resulting in reduced access to external capital, decreased employee commitment, and weakened customer relationships. Our results suggest that the public nature of PSCs has distinctive impacts on target firms compared to traditional short selling, primarily through their impact on the firm's stakeholders.

Keywords: Public short campaigns; Activist short selling; New product introductions; Real effects; Stakeholder relationship (search for similar items in EconPapers)
JEL-codes: G14 G23 G30 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:88:y:2024:i:c:s0929119924000865

DOI: 10.1016/j.jcorpfin.2024.102624

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