Short-sale refinancing and earnings response coefficient: evidence from China

Tingli Liu, Ying Jiang, Lizhong Hao
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引用次数: 1

Abstract

Purpose Although short selling has been legalized in China for nearly 10 years, due to the existence of short-sale constraints, its impact on corporate governance of listed companies remains unclear. This paper aims to examine the impact of short-sale refinancing on earnings quality after the short-selling constraints have been released. The authors further explore whether this impact is subject to the nature of property rights and shareholding structures. Design/methodology/approach This study is based on a sample of A-share firms in China for the period 2014–2016. The authors use earnings response coefficients (ERC) as a proxy for earnings quality. To empirically examine this issue, a matching sample is generated by using propensity score matching method (PSM) to reduce sample selection bias. Findings This study provides evidence that deregulation of short selling has positive external effect on corporate governance. The results indicate that the potential short-selling opportunities can effectively suppress earnings manipulation and improve earnings quality. However, the impact of short selling on earnings quality varies for companies with different nature of property rights and shareholding structure. Originality/value To the best of the authors’ knowledge, this is the first study to investigate the relationship between short selling and earnings quality in the unique setting of short-sale refinancing. This study provides new evidence on the impact of short selling at the micro level and calls for further deregulation of short selling. In addition, this study contributes to existing studies on short-sale refinancing by examining an emerging market.
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短期再融资与收益反应系数:来自中国的证据
目的虽然卖空在中国合法化已有近10年的历史,但由于卖空约束的存在,其对上市公司治理的影响尚不明确。本文旨在考察卖空约束解除后,卖空再融资对盈余质量的影响。作者进一步探讨了这种影响是否与产权和股权结构的性质有关。本研究基于2014-2016年中国a股公司的样本。作者使用盈余反应系数(ERC)作为盈余质量的代理。为了实证检验这一问题,采用倾向得分匹配法(PSM)生成匹配样本,以减少样本选择偏差。研究结果表明,放松卖空管制对公司治理具有积极的外部效应。结果表明,潜在的卖空机会可以有效地抑制盈余操纵,提高盈余质量。然而,不同产权性质和股权结构的公司,卖空对盈余质量的影响是不同的。原创性/价值据作者所知,这是第一个在卖空再融资的独特背景下调查卖空与盈余质量之间关系的研究。本研究从微观层面对卖空行为的影响提供了新的证据,并呼吁进一步放松对卖空行为的管制。此外,本研究通过考察新兴市场,对现有的短期再融资研究有所贡献。
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来源期刊
CiteScore
7.90
自引率
3.00%
发文量
28
期刊介绍: The International Journal of Accounting & Information Management focuses on publishing research in accounting, finance, and information management. It specifically emphasizes the interaction between these research areas on an international scale and within both the private and public sectors. The aim of the journal is to bridge the knowledge gap between researchers and practitioners by covering various issues that arise in the field. These include information systems, accounting information management, innovation and technology in accounting, accounting standards and reporting, and capital market efficiency.
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