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Relaxation of Short-Selling Constraints and Innovation Investments of Energy Industry in China

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  • Wenzhen Mai
  • Nik Intan Norhan Binti Abdul Hamid

Abstract

The purpose of this research is to determine the effect of short-selling restrictions on the corporate innovation investments of China's publicly traded energy businesses. According to external governance theory, it is predicted that the deregulation of short selling serves as a monitoring role for energy businesses' innovation investments, which are particularly vulnerable to energy efficiency issues. Between 2010 and 2018, a multiple linear regression is undertaken on a panel data set of Chinese 64-listed energy companies. According to descriptive data, the average innovation investment of Chinese energy businesses is 2.24%, indicating a low level of innovation in the energy sector. The regression findings demonstrate that easing short-selling limitations may benefit energy businesses' innovative activity. The outcomes of this study indicate that financial officials should explore further loosening short-selling restrictions, which might benefit sectors of the energy business that are highly dependent on technological innovation practices and performance.

Suggested Citation

  • Wenzhen Mai & Nik Intan Norhan Binti Abdul Hamid, 2022. "Relaxation of Short-Selling Constraints and Innovation Investments of Energy Industry in China," European Journal of Energy Research, European Open Science, vol. 2(5), pages 9-12, October.
    • Handle: RePEc:epw:energy:v:2:y:2022:i:5:id:7093
    DOI: 10.24018/ejenergy.2022.2.5.93
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    References listed on IDEAS

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    2. Wenzhen Mai & Nik Intan Norhan Binti Abdul Hamid, 2021. "The Moderating Effect of Family Business Ownership on the Relationship between Short-Selling Mechanism and Firm Value for Listed Companies in China," JRFM, MDPI, vol. 14(6), pages 1-20, May.
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