The Effect Of Short-selling Mechanism On Capital Allocation Efficiency Of Listed Companies

China's securities market had been banned short-selling transactions for a long time since established.China officially opened the pilot of margin trading on March 31,2010.Since that day,investors can short-sell securities that are included in margin trading,which marks the end of the "unilateral market" on China's securities market and the short-selling mechanism being officially introduced.The pilot of margin trading has been expanded several times since started,about thirty percent of Shanghai-Shenzhen A-share listed companies have been included in it at present.Academically,short-selling mechanism serves as a securities market trading mechanism which impact the pricing efficiency of the securities market,it also serves as an external governance mechanism for listed companies which impact the behavior of listed companies.From the perspective of external governance mechanism,this article studies how the short-selling mechanism will affect the capital allocation efficiency of listed companies.Based on the capital allocation process of the company's access to external financing and external investment,this article measures the capital allocation efficiency of listed companies by two indicators: investment efficiency and financing constraints.In addition,this article uses the double difference model for empirical research from the national and regional levels with the data of 787 listed companies in the Shanghai-Shenzhen A-shares from 2008 to 2016.The results show that,at the national level,the introduction of short-selling mechanism can improve the investment efficiency and reduce the financing constraints of listed companies,which proveing the company's capital allocation process of obtaining external financing and external investment more effective and the capital allocation efficiency of listed companies improving.What's more,the short-selling mechanism has a greater positive impact on the capital allocation efficiency of non-state-controlled listed companies.At the regional level,the short-selling mechanism has a significant effect on the capital allocation efficiency of listed companies in the eastern region.It has limited effect on the capital allocation efficiency of listed companies in the western region,but has not significantly improved the capital allocation efficiency of listed companies in the midlands.The research in this article confirms that the short selling mechanism can improve the capital allocation efficiency of Chinese listed companies effectively,which can enrich the research results of the implementation effect of short selling mechanism and the affecting factors of micro capital allocation efficiency.Also,this research could deepen the understanding about the economic effects of the short-selling mechanism at the micro level,and could provide empirical evidence for China to further promote the implementation of margin trading.