Enemy at the Gates: Short-selling and Firm Performance on Corporate Social Responsibility - Evidence from a Natural Experiment

Vanya  Rusinova; Georg Wernicke

Enemy at the Gates: Short-selling and Firm Performance on Corporate Social Responsibility - Evidence from a Natural Experiment

Vanya Rusinova, Georg Wernicke

Department of International Economics, Government and Business

HEC Paris

Research output: Contribution to conference › Paper › Research › peer-review

Abstract

In this paper, we test for a causal relationship between short-selling and firms’ performance on Corporate Social Responsibility (CSR). To establish causality, we use the exogenous variation in short-selling restrictions induced by the Pilot Program under Regulation SHO of 2004. The Pilot program decreased the costs of short-selling for randomly selected subset of firms which resulted in an increase in the threat of short-selling for these firms. Results from a sample of U.S. firms for the years 2002 - 2006 suggest that an increase in the likelihood of being subject to short-selling increases firm performance on CSR. We further test how the temporal orientation of firms’ institutional owners and different level of firms’ financing constraints moderate the relationship between short-selling and firm performance on CSR.

Original language	English
Publication date	2017
Publication status	Published - 2017
Event	Strategic Management Society 38th Annual International Conference. SMS 2018 - Paris Marriott Rive Gauche Hotel, Paris, France Duration: 22 Sept 2018 → 25 Sept 2018 Conference number: 38 https://www.strategicmanagement.net/paris/overview/overview

Conference

Conference	Strategic Management Society 38th Annual International Conference. SMS 2018
Number	38
Location	Paris Marriott Rive Gauche Hotel
Country/Territory	France
City	Paris
Period	22/09/2018 → 25/09/2018
Internet address	https://www.strategicmanagement.net/paris/overview/overview

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 12 Responsible Consumption and Production

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Cite this

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title = "Enemy at the Gates: Short-selling and Firm Performance on Corporate Social Responsibility - Evidence from a Natural Experiment",

abstract = "In this paper, we test for a causal relationship between short-selling and firms{\textquoteright} performance on Corporate Social Responsibility (CSR). To establish causality, we use the exogenous variation in short-selling restrictions induced by the Pilot Program under Regulation SHO of 2004. The Pilot program decreased the costs of short-selling for randomly selected subset of firms which resulted in an increase in the threat of short-selling for these firms. Results from a sample of U.S. firms for the years 2002 - 2006 suggest that an increase in the likelihood of being subject to short-selling increases firm performance on CSR. We further test how the temporal orientation of firms{\textquoteright} institutional owners and different level of firms{\textquoteright} financing constraints moderate the relationship between short-selling and firm performance on CSR.",

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T2 - Strategic Management Society 38th Annual International Conference. SMS 2018

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AU - Wernicke, Georg

N1 - Conference code: 38

PY - 2017

Y1 - 2017

N2 - In this paper, we test for a causal relationship between short-selling and firms’ performance on Corporate Social Responsibility (CSR). To establish causality, we use the exogenous variation in short-selling restrictions induced by the Pilot Program under Regulation SHO of 2004. The Pilot program decreased the costs of short-selling for randomly selected subset of firms which resulted in an increase in the threat of short-selling for these firms. Results from a sample of U.S. firms for the years 2002 - 2006 suggest that an increase in the likelihood of being subject to short-selling increases firm performance on CSR. We further test how the temporal orientation of firms’ institutional owners and different level of firms’ financing constraints moderate the relationship between short-selling and firm performance on CSR.

AB - In this paper, we test for a causal relationship between short-selling and firms’ performance on Corporate Social Responsibility (CSR). To establish causality, we use the exogenous variation in short-selling restrictions induced by the Pilot Program under Regulation SHO of 2004. The Pilot program decreased the costs of short-selling for randomly selected subset of firms which resulted in an increase in the threat of short-selling for these firms. Results from a sample of U.S. firms for the years 2002 - 2006 suggest that an increase in the likelihood of being subject to short-selling increases firm performance on CSR. We further test how the temporal orientation of firms’ institutional owners and different level of firms’ financing constraints moderate the relationship between short-selling and firm performance on CSR.

M3 - Paper

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ER -