Short-Selling Bans and the Global Financial Crisis: Are they Inter-Connected?

Martin T. Bohl, Badye Essid, Pierre Siklos ()
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Martin T. Bohl, Badye Essid, Pierre Siklos: Wilfrid Laurier University

LCERPA Working Papers from Laurier Centre for Economic Research and Policy Analysis

Abstract: This paper begins with the observation that short-selling bans spread globally in 2008. We find some evidence that the bans were unsuccessful at least insofar as they did not take into account the global component a short-selling ban which reduced equity returns in about a third of the 17 countries sampled, most notably in some of the major advanced economies. In the individual countries we examine, the bans had relatively little impact. Our results are suggestive as evidence that the bans stemmed further deterioration in stock prices that policy makers sought to avoid, at least in a few economies.

Keywords: Short-selling bans; Spillovers; Stock markets; Dynamic conditional correlations (search for similar items in EconPapers)
JEL-codes: G10 G12 (search for similar items in EconPapers)
Date: 2018-01-30, Revised 2018-01-30
New Economics Papers: this item is included in nep-fmk
Note: LCERPA Working Paper No. 2018-6, January 2018.
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Journal Article: Short-Selling Bans and the Global Financial Crisis: Are They Interconnected? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:wlu:lcerpa:0112

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