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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

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. This finding on management forecasts appears to be generalizable to other corporate disclosures.

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Date Created
  • 2015-03-01
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  • Text
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    Identifier
    • Digital object identifier: 10.1111/1475-679X.12068
    • Identifier Type
      International standard serial number
      Identifier Value
      0021-8456
    • Identifier Type
      International standard serial number
      Identifier Value
      1475-679X
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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

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