Research On Investment Behavior Of Short Sellers In China

With the deregulation of short selling,investors make profit by digging up bad news.However,it has not been a long time since the deregulation of short selling,and the pattern of unilateral market has not been fundamentally changed in China.Therefore,short selling investors must carefully select strategies to avoid losses since the power of various other investors is strong.Especially at this stage,the problems caused by information environment are frequent.The information environment of listed companies is widely concerned by scholars.Based on information motivation,short seller's investment behavior is bound to be influenced by information environment of listed companies.In this paper,we choose underlying stocks of securities margin trading as sample.Short selling strength of the standard stock as interpreted variable.Selecting internal control and earnings management of listed companies as the index of internal information environment,we select analyst's prediction accuracy and dispersion as indicators of external information environment.Studying the relationship between information environment and short selling investment strategy.The result shows that information environment is significantly positively related to the short selling strength,ie.the better the information environment,the higher the short selling strength.The positive relationship between information environment and short selling strength is more significant in large-scale enterprises.This indicates that,short selling investors carefully select short selling targets for risk aversion purposes.Under good information environment,short selling investors focus on bad news,and are more likely to conduct short selling.While under poor information environment,short selling investors may ignore bad news of companies since the poor information environment always brings doubt about the reliability of news.Currently,this kind of strategy inhibits the external governance function of short selling to some extent.There are some innovations in the following aspects.First,we study the behavior of short selling investors from the perspective of information environment,and find that Chinese short selling investors are different from those of developed stock market investors.Second,we find the reason why Chinese short sellers have unique investment behavior.