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 InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 10-106/2/DSF 1.
Date of creation: 19 Oct 2010
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short selling; ban; crisis; liquidity; price discovery;
Other versions of this item:
- Alessandro Beber & Marco Pagano, 2013. "Short-Selling Bans Around the World: Evidence from the 2007–09 Crisis," Journal of Finance, American Finance Association, vol. 68(1), pages 343-381, 02.
- 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.
- 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.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-30 (All new papers)
- NEP-FMK-2010-10-30 (Financial Markets)
- NEP-MST-2010-10-30 (Market Microstructure)
- NEP-REG-2010-10-30 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- 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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