Monetary policy uncertainty and short-selling: evidence from China’s A-share market

Wenjin Feng

International Journal of Managerial Finance, 2026, vol. 22, issue 2, 309-329

Abstract: PurposeThis study investigates how short sellers respond to monetary policy uncertainty (MPU) in China’s A-share market and whether firm-level characteristics moderate this relationship.Design/methodology/approachUsing panel data and MPU indices, we estimate regression models with firm and time fixed effects. We also explore heterogeneous effects based on ownership type and managerial shareholding.FindingsShort-selling activity increases during periods of high MPU. The effect is more pronounced for non-state-owned firms and those with higher managerial ownership, suggesting greater sensitivity to uncertainty due to financial and governance constraints.Originality/valueThis paper links macro-level policy uncertainty to micro-level trading behavior in an emerging market. It highlights how ownership and governance structures shape firm responses to uncertainty, offering new insights into the role of short sellers in monetary policy transmission.

Keywords: Monetary policy uncertainty; Short-selling; Investor sentiment; Stock volatility (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijmfpp:ijmf-07-2025-0334

DOI: 10.1108/IJMF-07-2025-0334

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