Short-Selling Bans Around the World: Evidence from the 2007–09 Crisis
AbstractMost stock exchange regulators around the world reacted to the 2007-2009 crisis byimposing bans or regulatory constraints on short-selling. Short-selling restrictions wereimposed and lifted at different dates in different countries, often applied to different sets ofstocks and featured different degrees of stringency. We exploit this considerable variationin short-sales regimes to identify their effects with panel data techniques, and find that bans(i) were detrimental for liquidity, especially for stocks with small market capitalization,high volatility and no listed options; (ii) slowed down price discovery, especially in bearmarket phases, and (iii) failed to support stock prices, except possibly for U.S. financialstocks.
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Bibliographic InfoArticle provided by American Finance Association in its journal Journal of Finance.
Volume (Year): 68 (2013)
Issue (Month): 1 (02)
Other versions of this item:
- Alessandro Beber & Marco Pagano, 2009. "Short-Selling Bans around the World: Evidence from the 2007-09 Crisis," CSEF Working Papers 241, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 03 Sep 2011.
- Alessandro Beber & Marco Pagano, 2010. "Short-Selling Bans around the World: Evidence from the 2007-09 Crisis," Tinbergen Institute Discussion Papers 10-106/2/DSF 1, Tinbergen Institute.
- Beber, Alessandro & Pagano, Marco, 2009. "Short-Selling Bans around the World: Evidence from the 2007-09 Crisis," CEPR Discussion Papers 7557, C.E.P.R. Discussion Papers.
- G01 - Financial Economics - - General - - - Financial Crises
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Interesting readings
by Ajay Shah in Ajay Shah's blog on 2009-11-20 20:47:00
- Interesting Readings for November 23, 2009
by Ajay Shah in Citizen Economists on 2009-11-23 15:32:02
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