The Effect Of Short-selling Constraints On Corporate Performance

On March 31,2010,the pilot of China's domestic margin financing and securities lending transaction was officially launched.Its emergence introduced the short selling mechanism into the market,marking the end of the "unilateral market era" of China's stock market.China's margin financing and securities lending transactions are a step-by-step expansion model.The number of underlying securities has expanded from the initial 90(including 50 SSE and 40 SZSE)to 950 on March 17,2017(including 525 SSE and 425 SZSE).This paper defines this process as deregulation of short selling.At present,most of the domestic literature research on deregulation of short selling focuses on the impact of the mechanism on the price of the target,Concerned about the impact of the development of margin financing and securities lending business on the economic and stability of financial markets.Most of which he microscopic research focuses on the perspective of investors and focuses on the investment behavior of bounded rational investors.Domestic research ignores the impact of short selling mechanisms on companies themselves.Enterprises are important participants in the entire market,and their own profit and development constitute the prosperity of the entire market.Based on China's capital market,this paper uses principal-agent theory,information asymmetry theory and effective market theory,and adopts a combination of normative research and empirical research.Using DID-PSM measurement model,selects A-share listed companies in 2008-2017 as samples,the empirical study research on the impact of China's deregulation of short selling.It has been found that the regulation of short selling has a positive impact on company performance,and this effect is more pronounced in the bull market.It proves that the deregulation is conducive to the formation of effective external supervision of the company's management,reducing the problem of agency and improving the level of corporate governance.Further research found that the higher the concentration of equity in the short-selling enterprises,the greater the impact of the deregulation of short-selling control system on corporate performance.The impact of the deregulation on corporate performance is reflected in which after the company became the target of financing and securities lending,it increased R&D investment and reduced leverage.