The Impact of Short-Selling Pressure on Corporate Employee Relations

Brockman, Paul; Luo, Juan; Xu, Limin

doi:10.2139/ssrn.3017607

Cited by 6 publications

(9 citation statements)

References 30 publications

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“…This seems different from Gao et al (2018) and Brockman et al (2016), who find the positive impacts of short-sale constraints on CSR and employee relations. Although these two studies investigate a broader range of CSR aspects, they do not provide direct evidence on the effect of Reg SHO on workplace safety.…”

Section: Short-selling Constraints and Investments In Workplace Safetycontrasting

confidence: 87%

“…To the extent that workplace safety can be considered as one specific type of CSR, our study is closely related to two recent studies by Gao et al (2018) and Brockman, Luo, and Xu (2016), who find a positive impact of short-sale constraints on CSR and employee relations. Specifically, Gao et al (2018) show that pilot firms try to send a positive signal to the market by improving their CSR performance and "standing out from the crowd."…”

Section: Introductionsupporting

confidence: 67%

“…Although these two studies investigate a broader range of CSR aspects, they do not provide direct evidence on the effect of Reg SHO on workplace safety. In particular, Brockman et al (2016) do not find a significant impact of the Reg SHO program on employees' health and safety concerns in their subsample analysis. This reveals that managers do not consider workplace safety as their top priority in preparation for possible increases in short-selling activities and decreases in stock prices.…”

Section: Short-selling Constraints and Investments In Workplace Safetymentioning

confidence: 73%

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Capital market frictions and human capital investment: Evidence from workplace safety around regulation SHO

Bai

Lee

Zhang

2020

The Financial Review

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This paper examines the effect of capital market frictions on firms' workplace safety. Using Regulation SHO as a natural experiment, we find a significant increase in work-related injury rates of pilot firms.The effect is stronger for firms in more competitive industries and with high financial constraints, and weaker for firms whose employees have high negotiating power and with good corporate governance. Further tests suggest that managers' myopia shifts their focus away from investments in workplace safety when workplace safety is not related to firm performance. Overall, the results highlight how capital market frictions affect firms' investment in human capital. K E Y W O R D Smanagerial myopia, regulation SHO, short selling, workplace safety

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Section: Short-selling Constraints and Investments In Workplace Safetycontrasting

confidence: 87%

Section: Introductionsupporting

confidence: 67%

Section: Short-selling Constraints and Investments In Workplace Safetymentioning

confidence: 73%

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Capital market frictions and human capital investment: Evidence from workplace safety around regulation SHO

Bai

Lee

Zhang

2020

The Financial Review

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“…Following Brockman et al (2020), we use a DiD design to mitigate the endogeneity concerns, including omitted variables and reverse causality, in this paper. Following Cho et al (2016), Jia (2017) and Huang and Hilary (2018), we use a sample of firms whose TMTs suffered sudden deaths [13] as exogenous events.…”

Section: Robustness Testsmentioning

confidence: 99%

Does top management team’s job mobility experience matter for corporate innovation?

Jia

et al. 2022

PAR

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Purpose This study aims to investigate whether top management team (TMT)’s job mobility experience is related to firm innovation. Design/methodology/approach The authors use different strategies, including a two-stage instrumental model, difference-in-differences analysis based on TMT members’ sudden deaths, propensity score matching and firm fixed-effects model, to mitigate endogeneity concerns. Findings The authors find that firms whose TMT experienced more job mobility have better firm innovation. In addition, the authors reveal that the job mobility experience is positively related to engagement in explorative innovation strategies that generate new knowledge. The findings are robust to a battery of tests to alleviate potential endogeneity concerns. Overall, the results highlight the role of job mobility experience in influencing firm innovation. Originality/value This study contributes to the rising literature on the determinants of firm innovation. By showing the TMT’s job mobility experience is related to innovation, the authors expand the literature about the economic consequences of the heterogeneous TMT characteristics. Given that firm innovation is essential to competitive advantage, the results should be of interest to a range of stakeholders, including investors, directors and managers and policymakers.

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“…From a narrower perspective in the CSR field, Brockman et al (2017) investigated the impact of short selling on corporate employee relations in the U.S. "Since employees are a group of important stakeholders who can shape a firm's financial leverage, cash holding, and dividend policies, firm managers are likely to improve their employee-relation policies to avoid being targeted by short sellers" (Brockman et al, 2017). They found that firms respond to increased threats of short selling by significantly improving their employee relations, enhancing employee security to reduce the likelihood of negative announcements that might attract short-selling interest.…”

Section: The Impact Of Short Selling On Corporate Social Responsibilitymentioning

confidence: 99%

The Impact of Short Selling on Firms: An Empirical Literature Review

Caby¹

2020

JBAFP

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This review surveys the existing empirical literature on the real effects of short selling on firms, addressing them through three main perspectives: corporate governance, financial decisions, and performance. The results of the (too) few empirical studies under scrutiny converge to a common rationale: a positive impact as a disciplinary mechanism on corporate governance and corporate investment policy and a positive impact on operating and corporate social responsibility (CSR) performance, even if some results are still puzzling. It appears that further investigations are necessary and should test the consequences of short selling on firms from a broader and more systematic perspective, with different theoretical and methodological approaches.

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The Impact of Short-Selling Pressure on Corporate Employee Relations

Cited by 6 publications

References 30 publications

Capital market frictions and human capital investment: Evidence from workplace safety around regulation SHO

Capital market frictions and human capital investment: Evidence from workplace safety around regulation SHO

Does top management team’s job mobility experience matter for corporate innovation?

The Impact of Short Selling on Firms: An Empirical Literature Review

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