The Influence Of Short Selling Mechanism On Insider Sales

The development of Chinese stock market has been more than thirty years,which is relatively young compared with the development history of foreign countries over 100 years.Some chaos and problems in the market still need to be regulated and solved.As one of the focuses of the market for a long time,the insider’s reduction behavior seems to have been behind the insider’s self-interested behavior and wealth transfer motivation.For illegal reduction,disordered reduction and other behavior to chaos the normal order of the market,the regulatory authorities for a long time to improve the relevant laws and regulations and focus on the crackdown,but the effect is relatively limited,the reduction problem is still serious.This is because the regulation of the reduction behavior through the revision of laws and regulations is more inclined to a plan method of making up after the event,resulting in the overall efficiency of the reduction supervision.Therefore,starting from the external mechanism of short selling,this paper tries to explore the influence of market-based approach on insiders’ selling behavior,which is conducive to the improvement of management efficiency.And our country’s short selling mechanism using progressive expansion method since 2010 has been more and more ten years of development,transaction and transaction scale is larger and larger,has become a force in the market can not be ignored.Based on the data of short selling deregulation and insider selling from 2007 to 2021,this paper studies the influence of short selling mechanism on insider selling.At the same time,the possible influencing mechanism between short selling mechanism and insider selling mechanism,including governance environment and self-interested behavior,is studied.Finally,the possible heterogeneity effects were studied by grouping regression.This paper has very important theoretical and practical significance,and provides more empirical evidence for our macro-micro cross-study.The research conclusions of this paper show that: first,the implementation of short selling mechanism can significantly inhibit the probability and intensity of insider selling,and after a series of robustness tests,the conclusion is still significantly valid;Second,in terms of the influence mechanism,it is found that the short-selling mechanism can further inhibit the insider’s shorting behavior by improving the corporate governance environment and restraining the insider’s self-interested behavior.Third,compared with state-owned enterprises,the short-selling mechanism in non-state-owned enterprises has a stronger inhibition effect on insider selling.Based on the research conclusion of this paper,the short-selling mechanism provides a market-based governance method to restrain the insider’s shorting behavior,and puts forward suggestions from two aspects of shorting supervision and short-selling control.In addition to continuing to adhere to and improve the rules and regulations of reducing holdings,it is also necessary to moderately relax the control of short selling,strengthen the education of investors on the concept of short selling,further strengthen the positive role of short selling mechanism,and actively promote the high-quality development of short selling mechanism.