Using a natural experiment (Regulation SHO), we show that short selling pressure and consequent stock price behavior have a causal effect on managers’ voluntary disclosure choices. Specifically, we find that managers respond to a positive exogenous shock to short selling pressure and price sensitivity to bad news by reducing the precision of bad news forecasts.
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- Digital object identifier: 10.1111/1475-679X.12068
- Identifier TypeInternational standard serial numberIdentifier Value0021-8456
- Identifier TypeInternational standard serial numberIdentifier Value1475-679X
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Li, Yinghua, & Zhang, Liandong (2015). Short Selling Pressure, Stock Price Behavior, and Management Forecast Precision: Evidence from a Natural Experiment. JOURNAL OF ACCOUNTING RESEARCH, 53(1), 79-117. http://dx.doi.org/10.1111/1475-679X.12068