Short Selling and Performance on Corporate Social Responsibility: Evidence from a Natural Experiment

Vanya Rusinova, Georg Wernicke

Publikation: Bidrag til bog/antologi/rapportKonferencebidrag i proceedingsForskningpeer review

Abstrakt

In this paper, we test for a causal relationship between an increase in the threat of a firm's stocks being shorted and firm performance on Corporate Social Responsibility (CSR). Building upon the risk-management perspective of CSR, we argue that when faced with an increase in the threat of short-sellers targeting the firm, managers counteract the potential pressure on the firm’s stock price by increasing the firm’s CSR performance. To establish causality, we use the exogenous variation in the cost of short-selling induced by the Pilot Program under Regulation SHO of 2004 which decreased the costs of short-selling for a randomly selected subset of Russell 3000 firms. Results from the difference-in-difference (DiD) analysis support our hypothesis. We then further theorize that the temporal orientation of the firm’s institutional owners, the level of financing constraints and the firm’s own time horizon moderate the relationship between the threat of short selling and firm performance on CSR.
OriginalsprogEngelsk
TitelProceedings of the Seventy-ninth Annual Meeting of the Academy of Management
RedaktørerGuclu Atinc
Antal sider6
Udgivelses stedBriar Cliff Manor, NY
ForlagAcademy of Management
Publikationsdato2019
Sider25-30
Artikelnummer5
DOI
StatusUdgivet - 2019
BegivenhedThe Academy of Management Annual Meeting 2019: Understanding the Inclusive Organization - Boston, USA
Varighed: 9 aug. 201913 aug. 2019
Konferencens nummer: 79
http://aom.org/annualmeeting/

Konference

KonferenceThe Academy of Management Annual Meeting 2019
Nummer79
LandUSA
ByBoston
Periode09/08/201913/08/2019
Internetadresse
NavnAcademy of Management Proceedings
ISSN2151-6561

Citationsformater

Rusinova, V., & Wernicke, G. (2019). Short Selling and Performance on Corporate Social Responsibility: Evidence from a Natural Experiment. I G. Atinc (red.), Proceedings of the Seventy-ninth Annual Meeting of the Academy of Management (s. 25-30). [5] Briar Cliff Manor, NY: Academy of Management. Academy of Management Proceedings https://doi.org/10.5465/AMBPP.2019.5