Can Short Selling Suppress Enterprises'Leverage Manipulation?
Taking the A-share listed companies from 2007 to 2022 in China as the research sample,the paper investi-gates the impact of short selling on enterprises'leverage manipulation.It is found that short selling can effectively sup-press enterprises'leverage manipulation.The"information effect"and the"deterrence effect"are two pathways through which short selling inhibit corporate leverage manipulation.Heterogeneity analysis shows that the impact of short selling on corporate leverage manipulation is more pronounced in companies with lower internal governance levels,greater external regulatory distance and more severe degree of financing constraints.Focusing on bond issuance scenario,the paper finds that short selling significantly curbs leverage manipulation by companies issuing bonds.Considering the means of leverage manipulation,the study demonstrates that short selling can significantly reduce the magnitude of off-balance sheet liabilities and real debt in the name of shares,thereby suppressing corporate leverage manipulation.
short sellingleverage manipulationinformation effectdeterrence effect
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