Short-Selling Bans around the World: Evidence from the 2007-09 Crisis

Alessandro Beber () and Marco Pagano

Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Most stock exchange regulators around the world reacted to the 2007-2009 crisis byimposing bans or regulatory constraints on short-selling. Short-selling restrictions wereimposed and lifted at different dates in different countries, often applied to different sets ofstocks and featured different degrees of stringency. We exploit this considerable variationin short-sales regimes to identify their effects with panel data techniques, and find that bans(i) were detrimental for liquidity, especially for stocks with small market capitalization,high volatility and no listed options; (ii) slowed down price discovery, especially in bearmarket phases, and (iii) failed to support stock prices, except possibly for U.S. financialstocks.

Keywords: short selling; ban; crisis; liquidity; price discovery (search for similar items in EconPapers)
JEL-codes: G01 G12 G14 G18 (search for similar items in EconPapers)
Date: 2010-10-19
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Short-Selling Bans Around the World: Evidence from the 2007–09 Crisis (2013)
Working Paper: Short-Selling Bans around the World: Evidence from the 2007-09 Crisis (2011)
Working Paper: Short-Selling Bans around the World: Evidence from the 2007-09 Crisis (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20100106

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