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Short-Selling Bans and the Global Financial Crisis: Are They Interconnected?

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  • Martin T. Bohl
  • Badye Essid
  • Pierre L. Siklos

Abstract

This paper begins with the observation that short-selling bans spread globally in 2008. We find some evidence that the bans were unsuccessful at least insofar as they did not take into account the global component a short-selling ban which reduced equity returns in about a third of the 17 countries sampled, most notably in some of the major advanced economies. In the individual countries we examine, the bans had relatively little impact. Our results are suggestive as evidence that the bans stemmed further deterioration in stock prices that policy makers sought to avoid, at least in a few economies.

Suggested Citation

  • Martin T. Bohl & Badye Essid & Pierre L. Siklos, 2018. "Short-Selling Bans and the Global Financial Crisis: Are They Interconnected?," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot GmbH, Berlin, vol. 64(2), pages 159-177.
    • Handle: RePEc:dah:aeqaeq:v64_y2018_i2_q2_p159-177
    DOI: 10.3790/aeq.64.2.159
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    More about this item

    Keywords

    Short-selling bans; spillovers; stock markets; dynamic conditional correlations;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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