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- Title
The determinants of short selling: evidence from the Hong Kong equity market.
- Authors
McKenzie, Michael; Henry, Ólan T.
- Abstract
While most financial regulators agree that short sellers have an important role to play in ensuring an efficiently functioning market, it is interesting to note that many did not hesitate to ban short selling during the recent financial crisis. This apparent contradiction most likely stems from a lack of understanding about what motivates short trading. In this paper, we focus on the determinants of short selling during 'normal' trading in the Hong Kong stock market. We find that dividend payments, company fundamentals, risk, option trading, the interest rate spread and past returns and short selling are all significant determinants of short selling.
- Subjects
HONG Kong (China); CHINA; SHORT selling (Securities); EFFICIENT market theory; STOCKS (Finance); STOCK exchanges; FINANCIAL crises
- Publication
Accounting & Finance, 2012, Vol 52, p183
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/j.1467-629X.2011.00437.x