Short-selling restrictions and firms’ environment responsibility

Shuxun Wang and Dongyang Zhang

Research in International Business and Finance, 2020, vol. 54, issue C

Abstract: We examine the effect of short selling on firms’ environmental pollution control behavior. Using novel data from Chinese listed firms, we demonstrate that when the short selling of stocks is permitted, the respective firms invest more in pollution protection. Consequently, ex ante threats to short selling could potentially explain firms’ investment in pollution protection. In contrast, we do not find a positive relation between margin trading and firms’ pollution protection expenses. We further discover that the effect of short selling is more pronounced in firms with lower institutional ownership and lower market competition. These findings shed light on the role of short sales in pollution abatement.

Keywords: Short selling; Pollution protection expense; China (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0275531920300350
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:54:y:2020:i:c:s0275531920300350

DOI: 10.1016/j.ribaf.2020.101295

Access Statistics for this article

Research in International Business and Finance is currently edited by T. Lagoarde Segot

More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().