IDEAS home Printed from https://ideas.repec.org/p/ecl/ohidic/2018-06.html
   My bibliography  Save this paper

Do Short Sellers Cause CEOs to Be Fired? Evidence from a Randomized Experiment

Author

Listed:
  • Bennett, Benjamin

    (Ohio State University)

  • Wang, Zexi

    (University of Bern)

Abstract

We study the short-selling effect on forced CEO turnover. Using difference-in-differences analyses based on the SEC Regulation SHO Pilot Program, we find short selling increases the likelihood of forced turnover. Theories suggest two potential mechanisms: informed short sellers reveal negative information (Revelation), while uninformed short sellers manipulate prices (Manipulation). Consistent with Revelation, we find stronger effects when firms have more earnings management, less informative stock prices, and less competitive product markets. Consistent with Manipulation, we find stronger effects when firms have more growth opportunities, fewer blockholders, and less volatile stock. Manipulative short selling decreases the efficiency of forced turnover.

Suggested Citation

  • Bennett, Benjamin & Wang, Zexi, 2018. "Do Short Sellers Cause CEOs to Be Fired? Evidence from a Randomized Experiment," Working Paper Series 2018-06, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    • Handle: RePEc:ecl:ohidic:2018-06
    as

    Download full text from publisher

    File URL: https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3155641_code1542588.pdf?abstractid=3135483&mirid=1
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tianyu Cai & Lixiong Guo & Yongxian Tan, 2024. "Short seller monitoring and real earnings management," The Financial Review, Eastern Finance Association, vol. 59(1), pages 203-225, February.

    More about this item

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ecl:ohidic:2018-06. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cdohsus.html .

    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.