Can Short Restrictions Actually Increase Informed Short Selling? Academic Article

abstract

• We use the 2008 short selling regulations to test whether short sale restrictions can increase informed short selling. For the preborrow requirement, we find more negative price reactions to short interest announcements though no reliable increase in the price impact of short sales volume. For the stocks with banned short sales, we find an increase in the price impact of short sale volume though no reliable change in the price reaction to short interest announcements. Both restrictions, however, are associated with increased informed trading. Our results suggest that short restrictions will not reduce informed short selling and may actually result in an increase by increasing the proportion of informed short sellers.. 2013 Financial Management Association International.

authors

• Kolasinski, Adam

published proceedings

• Financial Management

altmetric score

• 0.5

author list (cited authors)

• Kolasinski, A. C., Reed, A., & Thornock, J. R.

citation count

• 75

publication date

• March 2013

publisher

• Wiley  Publisher

keywords

• 35 Commerce, Management, Tourism And Services
• 3502 Banking, Finance And Investment

Digital Object Identifier (DOI)

• 10.1111/j.1755-053x.2012.01223.x

start page

• 155

end page

• 181

volume

• 42

issue

• 1

URL

• http://dx.doi.org/10.1111/j.1755-053x.2012.01223.x