IDEAS home Printed from https://ideas.repec.org/a/eee/pacfin/v97y2026ics0927538x26000375.html

Short selling and the probability of informed trading: Insights from interlocking directorate networks

Author

Listed:
  • Li, Yanan
  • Shi, Yunhui
  • Sha, Yezhou

Abstract

We employ a staggered DID model to estimate the effect of the short selling policy on the probability of informed trading. Using data and stepwise ease of short selling ban from China's A-share listed stocks during 2006–2022, we find that short selling policy reduces the probability of informed trading. To explore underlying mechanisms, we adopt a social network perspective, focusing on structural holes and centrality in interlocking directorate networks. The results indicate interlocking directorate networks positively mediate the relationship between short selling and the probability of informed trading. We further find the suppressive impact of short selling on the probability of informed trading is stronger under higher separation of ownership and control, ownership concentration, institutional ownership, and market attention. We recommend regulators consider interlocking directorate network characteristics and corporate features when developing regulatory strategies.

Suggested Citation

  • Li, Yanan & Shi, Yunhui & Sha, Yezhou, 2026. "Short selling and the probability of informed trading: Insights from interlocking directorate networks," Pacific-Basin Finance Journal, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:pacfin:v:97:y:2026:i:c:s0927538x26000375
    DOI: 10.1016/j.pacfin.2026.103091
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927538X26000375
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.pacfin.2026.103091?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pacfin:v:97:y:2026:i:c:s0927538x26000375. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/pacfin .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.