Topic:Do short sales affect a firm’s financial constraints?
Lecturer: Xinyu LI, Renmin University of China
Time: 2:00-3:30 p.m. October 31st, 2019 (Thursday)
Venue: B219, Zhixin Building
Abstract: The topic of this seminar focuses on the effect of short sales on a firm’s financial constraints in Chinese capital market based on three conceptual frameworks, the negative information effect, the undervaluation effect, and the deterrent effect. Our findings suggest that short sales generally worsen a firm’s financial constraints by uncovering its incremental negative information to the market and increase its external financing cost, which support the underlying logic of the negative information effect.