Market manipulation and innovation

Douglas Cumming, Shan Ji, Rejo Peter and Monika Tarsalewska

Journal of Banking & Finance, 2020, vol. 120, issue C

Abstract: End-of-day stock price manipulation is generally associated with short-termism, long-term damage to equity values, and reduced incentives for employees to innovate. We use a sample of suspected stock price manipulation events based on intraday data for stocks from nine countries over eight years and find evidence of negative effects of market manipulation on innovation. We show that these negative effects are particularly harmful to innovation in markets with low intellectual property rights and high shareholder protection.

Keywords: Market manipulation; End-of-day dislocation; Patents; Innovation; Intellectual property rights; Shareholder protection (search for similar items in EconPapers)
JEL-codes: G14 G18 O30 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:120:y:2020:i:c:s0378426620302193

DOI: 10.1016/j.jbankfin.2020.105957

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