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UK short selling activity and firm performance

Andrikopoulos, P., Clunie, J., and Siganos, A. (2012) UK short selling activity and firm performance. Journal of Business Finance and Accounting, 39 (9-10). pp. 1403-1417. ISSN 0306-686X

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Publisher's URL: http://onlinelibrary.wiley.com/doi/10.1111/jbfa.12003/abstract

Abstract

We use short selling data from Data Explorers from 2004 to 2012 to investigate the extent to which UK short sellers are informed investors, in accordance with Diamond and Verrecchia's (1987) hypothesis. Our results suggest that heavily-shorted stocks fail to consistently underperform their lightly-shorted counterparts. Short sellers’ ability to predict firm performance is limited to firms that struggle for survival, such as firms about to enter bankruptcy or financial firms during the financial crisis. These results provide new evidence regarding the source of short-sellers’ information and should be of interest to academics, financial regulators and market participants.

Item Type:Article
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Siganos, Mr Antonios and Andrikopoulos, Dr Panagiotis
Authors: Andrikopoulos, P., Clunie, J., and Siganos, A.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Journal of Business Finance and Accounting
Publisher:Blackwell Publishing
ISSN:0306-686X
ISSN (Online):1468-5957
Published Online:11 January 2013
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