Research On The Impact Of Short Selling Mechanism On Corporate Violation

As the cornerstone of the capital market,the quality of the company is the source of investment value in the capital market,an important support for the transformation and upgrading of the economic structure,and an important content of the socialist economic system.However,at present,the construction of the rule of law in China’s capital market is not perfect,and corporate violations occur frequently,and the violations of listed companies will seriously affect the market reputation,financing cost,market value,and even the operating efficiency of the entire capital market.Therefore,it is of great practical significance to explore how to effectively regulate corporate behavior to promote the high-quality development of Chinese enterprises and the healthy development of the capital market.Based on this,taking the A-share non-financial listed companies in China from 2008 to2021 as the research object,a multi-temporal DID model is established to deeply explore the impact of the short selling mechanism on corporate violations.The results show that:(1)The short selling mechanism can play its governance role and curb the violations of listed companies.After the robustness test was performed by replacing key variable index measures,placebo test,and regression after PSM matching,the conclusion remained unchanged.(2)The influence mechanism shows that short selling investors pay attention to the target company through professional mining of negative news of enterprises,increase the exposure of negative information of enterprises,thereby improving the degree of general investors’ attention to negative news of enterprises and the efficiency of investors’ attention,increasing the cost of corporate violations,and reducing the level of corporate violations.That is,the short selling mechanism will affect the compliance of listed companies by increasing investor attention;(3)Further research finds that the impact of the short selling mechanism on violations mainly comes from the securities lending mechanism,rather than the financing mechanism;(4)This paper also examines the influence of different social trust levels on the implementation effect of the short selling mechanism,and finds that the short selling mechanism and social trust have an alternative layout,that is,in areas with low social trust,the impact of the short selling mechanism on the company’s violation behavior will be more significant.In addition,in regions with a high proportion of institutional investors,the effect of short selling mechanisms on corporate violations is more obvious.The conclusion of this paper provides evidence for the impact of short selling mechanism on corporate violations,and expands the research on the impact of short selling mechanism and listed companies’ violations,which has important enlightenment significance for regulators,enterprises and investors.