An Empirical Research On Short Selling And Debt Financing

On March 31,2010,China's securities market opened a trial for margin financing and securities lending business,which is marking the formal introduction of the policy that loosening short-selling control.Allowing investors to borrow funds or target stocks from designated brokers to buy short-selling transactions,changing the history of China's stock market to limit short selling,the end of the unilateral market has aroused widespread concern in the market.Short selling as a market trading mechanism has extensive influence on China's financial market,enterprises and other market entities.However,as the capital demand side in the debt financing market,how to choose a reasonable debt scale and financing deadline,whether it can obtain the funds it needs in the financing market will inevitably be affected by the short-selling mechanism on the capital market.There have been in-depth discussions on the relation of short-selling mechanism and the market,company's behavior and the resulting economic consequences.However,these existing studies rarely involve corporate debt financing.This article will start with the company's debt financing,in-depth discussion of the relationship between short-selling mechanism and corporate debt financing.As China's margin financing and securities lending transactions adopt a step-by-step approach,according to relevant standards,the underlying stocks of margin trading and short selling are designated,and the scope of the target shares is gradually increased in stages.This approach allows the market to have both short-selling and non-selling stocks,providing us with natural research opportunities for building a dual-difference model.This article uses 2007-2017 Chinese listed company as a sample to study whether relaxing the short-sales control has an impact on the debt financing of listed companies.It is proposed that the introduction of the short-selling mechanism can affect creditor's credit decisions through the dual roles of information mechanism and governance mechanism respectively.The corporate debt financing behavior leads to a short-selling business.Short-selling mechanisms allow short-selling companies to have smaller financing scales and shorter debt financing terms.In addition,this article also joins the information mediation that analysts pay attention to to examine how the effect of short-selling mechanism on debt financing will be affected by the analyst.This article analyzes the information transfer role and governance role that analysts focus on.It discusses its role in supplementing and weakening the information mechanism and governance mechanism of short-selling mechanism,and proposes that analysts focus on the promotion and reduction of the impact of short-selling mechanism on corporate debt contract.The dual role.Empirical studies have found that compared with no-selling companies,higher analyst attention can reduce the short-selling mechanism's impact on debt financing of short-selling companies.The research in this paper is of great significance for understanding and evaluating the impact of the margin trading system on the Chinese market.It also provides new ideas for follow-on research on short selling transactions and debt financing.