Short sellers and the informativeness of stock prices with respect to future earnings
Michael S. Drake (),
James N. Myers,
Linda A. Myers and
Michael D. Stuart
Additional contact information
Michael S. Drake: Brigham Young University
James N. Myers: University of Arkansas
Linda A. Myers: University of Arkansas
Michael D. Stuart: Vanderbilt University
Review of Accounting Studies, 2015, vol. 20, issue 2, No 5, 747-774
Abstract:
Abstract We examine whether short interest improves the informativeness of stock prices with respect to future earnings. We find that short selling strengthens the relation between current returns and future earnings, especially in settings where short sellers are likely to possess an information advantage, such as when a firm’s information environment is weak or when analysts are highly optimistic about future earnings growth. Collectively, our results illustrate the important role that short sellers play in improving the extent to which current stock prices reflect information about future earnings and thus in improving market efficiency.
Keywords: Short sellers; Short interest; Future earnings response coefficient (FERC); Market efficiency (search for similar items in EconPapers)
JEL-codes: G17 M40 M41 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:
Downloads: (external link)
http://link.springer.com/10.1007/s11142-014-9313-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
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:spr:reaccs:v:20:y:2015:i:2:d:10.1007_s11142-014-9313-8
Ordering information: This journal article can be ordered from
http://www.springer.com/accounting/journal/11142
DOI: 10.1007/s11142-014-9313-8
Access Statistics for this article
Review of Accounting Studies is currently edited by Paul Fischer
More articles in Review of Accounting Studies from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().