Alternative Title
Short sellers and corporate disclosure
Publication Type
Journal Article
Version
submittedVersion
Publication Date
6-2020
Abstract
We examine how short sellers affect long‐run management forecasts using a natural experiment (Regulation SHO) that relaxes short‐selling constraints on a group of randomly selected firms (referred to as pilot firms). We find that compared to other firms, the pilot firms issue more long‐run good news forecasts but do not change the frequency of long‐run bad news forecasts. The increase in good news forecasts is greater when the pilot firms have higher quality forecasts, greater uncertainty about firm value, or higher manager equity incentives. Overall, these results and the results of additional analyses indicate that the reduction in short‐selling constraints and the increase in short‐selling threat induce managers to enhance disclosures through more long‐run good news forecasts to discourage short sellers.
Keywords
Short Sellers, Corporate Disclosures, Management Forecasts
Discipline
Accounting | Corporate Finance
Research Areas
Corporate Reporting and Disclosure
Publication
Contemporary Accounting Research
Volume
37
Issue
2
First Page
802
Last Page
828
ISSN
0823-9150
Identifier
10.1111/1911-3846.12554
Publisher
Canadian Academic Accounting Association
Citation
CHEN, Xia; CHENG, Qiang; LUO, Ting; and YUE, Heng.
Short sellers and long‐run management forecasts. (2020). Contemporary Accounting Research. 37, (2), 802-828.
Available at: https://ink.library.smu.edu.sg/soa_research/1821
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/1911-3846.12554