Short Selling and Earnings Management: A Controlled Experiment

被引:266
作者
Fang, Vivian W. [1 ]
Huang, Allen H. [2 ]
Karpoff, Jonathan M. [3 ]
机构
[1] Univ Minnesota, Minneapolis, MN 55455 USA
[2] Hong Kong Univ Sci & Technol, Hong Kong, Hong Kong, Peoples R China
[3] Univ Washington, Seattle, WA 98195 USA
关键词
SHORT-SALES CONSTRAINTS; SHORT SELLERS; PRICE DISCOVERY; MARKET QUALITY; PERFORMANCE; FUTURE; MANIPULATION; BEHAVIOR; COMPENSATION; ASYMMETRY;
D O I
10.1111/jofi.12369
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
During 2005 to 2007, the SEC ordered a pilot program in which one-third of the Russell 3000 index were arbitrarily chosen as pilot stocks and exempted from shortsale price tests. Pilot firms' discretionary accruals and likelihood of marginally beating earnings targets decrease during this period, and revert to pre-experiment levelswhen the program ends. After the program starts, pilot firms are more likely to be caught for fraud initiated before the program, and their stock returns better incorporate earnings information. These results indicate that short selling, or its prospect, curbs earnings management, helps detect fraud, and improves price efficiency.
引用
收藏
页码:1251 / 1294
页数:44
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