ABSTRACT
This research assesses the effect of short sales on investment efficiency in China by applying the DID method. Results show that short sales can improve investment efficiency and that the effect is more pronounced for companies with low information transparency, low governance capacity, low audit quality, and high management performance pressure. Evidence reveals that the impact of short sales varies under different market sentiments. Our findings support the beneficial role of short sales on the information and governance environment. Governments and investors can thus pay more attention to short sales, as they help in their role of accelerating information dissemination.
Acknowledgments
The authors are grateful to the Editor and the three anonymous referees for helpful comments and suggestions. Chien-Chiang Lee acknowledges the financial supports from the funding.
Disclosure Statement
No potential conflict of interest was reported by the author(s).
Supplementary Material
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