Disciplining Role of Short Sellers: Evidence From M&A Activity

dc.contributor.authorShi, Wei
dc.contributor.authorNdofor, Hermann Achidi
dc.contributor.authorHoskisson, Robert E.
dc.contributor.departmentKelley School of Businessen_US
dc.date.accessioned2023-06-12T18:20:59Z
dc.date.available2023-06-12T18:20:59Z
dc.date.issued2021-05
dc.description.abstractPrior research has focused on the influence of long investors (e.g., institutional investors) on merger-and-acquisition (M&A) decisions. This study investigates the role of short sellers in shaping managerial acquisitiveness and M&A decision quality. Short sellers impose a downward pressure on stock prices by disseminating negative information to the market. Given that managerial wealth and job security hinge on stock prices, top managers respond to increased short selling by refraining from excessive M&A activities because M&As could provide opportunities for short sellers to spread negative information and dampen stock prices. Furthermore, the negative influence of short sellers on managerial acquisitiveness is enhanced by the market for corporate control as an external governance mechanism and by CEO equity ownership as an internal governance mechanism. When firms with increasing short selling do engage in M&As, they gain higher M&A announcement returns and operating performance. We test our hypotheses using firms in the S&P 1500 from 2002 to 2014 and find support for our arguments.en_US
dc.eprint.versionAuthor's manuscripten_US
dc.identifier.citationShi, W., Ndofor, H. A., & Hoskisson, R. E. (2021). Disciplining Role of Short Sellers: Evidence From M&A Activity. Journal of Management, 47(5), 1103–1133. https://doi.org/10.1177/0149206320912307en_US
dc.identifier.issn0149-2063, 1557-1211en_US
dc.identifier.urihttps://hdl.handle.net/1805/33682
dc.language.isoen_USen_US
dc.publisherSageen_US
dc.relation.isversionof10.1177/0149206320912307en_US
dc.relation.journalJournal of Managementen_US
dc.rightsPublisher Policyen_US
dc.sourceAuthoren_US
dc.subjectlong investorsen_US
dc.subjectmerger & acquisitionen_US
dc.subjectshort sellersen_US
dc.titleDisciplining Role of Short Sellers: Evidence From M&A Activityen_US
dc.typeArticleen_US
Files
Original bundle
Now showing 1 - 1 of 1
Loading...
Thumbnail Image
Name:
Shi2021Disciplining-AAM.pdf
Size:
434.51 KB
Format:
Adobe Portable Document Format
Description:
Article
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.99 KB
Format:
Item-specific license agreed upon to submission
Description: