Equity Short Selling and the Bank Loan Market

Po Hsin Ho, Chih Yung Lin, Tse Chun Lin

研究成果: 雜誌貢獻期刊論文同行評審

摘要

Using a difference-in-differences approach, we show that relaxation of short-sale constraints helps to filter out low-quality borrowers from the bank loan market. Treated firms that can still borrow from banks enjoy a lower loan spread, compared with control firms without this sorting mechanism. The results show that such treated borrowers have improved information asymmetry and credit risk, as well as better nonprice contract terms. Overall, equity short selling has a real effect on the bank loan market by weeding out poor-quality borrowers, resulting in a lower cost of private debt for remaining borrower firms.

原文???core.languages.en_GB???
頁(從 - 到)349-379
頁數31
期刊Journal of Money, Credit and Banking
54
發行號2-3
DOIs
出版狀態已出版 - 1 3月 2022

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