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dc.contributor.authorTsai, H.-J.
dc.contributor.authorWu, Yuliang
dc.contributor.authorXu, B.
dc.date.accessioned2021-07-23T08:23:59Z
dc.date.available2021-07-23T08:23:59Z
dc.date.issued2021-08
dc.identifier.citationTsai H-J, Wu Y and Xu B (2021) Does capital market drive corporate investment efficiency? Evidence from equity lending supply. Journal of Corporate Finance. 69: 102042.en_US
dc.identifier.urihttp://hdl.handle.net/10454/18561
dc.descriptionYesen_US
dc.description.abstractThe increased equity lending supply (ELS) in the equity loan market, available for short sellers to borrow, exposes a firm to greater short selling threats. Considering short sellers’ strong incentives to uncover firm-specific information and monitor managers, we hypothesize that short selling threats, proxied by ELS, enhance corporate investment efficiency. We find that ELS significantly reduces managerial tendencies to underinvest (overinvest) especially for firms prone to underinvest (overinvest). The effect of ELS on investment efficiency is stronger for firms with higher information asymmetry and weaker corporate governance, confirming short sellers’ role in mitigating information and agency costs. However, short selling risk weakens the effect of ELS. Our evidence is robust to endogeneity checks and suggests that corporate investment can be driven by a particular capital market condition: the amount of lendable shares in the equity loan market.en_US
dc.language.isoenen_US
dc.relation.isreferencedbyhttps://doi.org/10.1016/j.jcorpfin.2021.102042en_US
dc.rights© 2021 Elsevier. Reproduced in accordance with the publisher's self-archiving policy. This manuscript version is made available under the CC-BY-NC-ND 4.0 license (https://creativecommons.org/licenses/by-nc-nd/4.0/)en_US
dc.subjectEquity lending supplyen_US
dc.subjectShort selling threatsen_US
dc.subjectCorporate investment efficiencyen_US
dc.subjectFinancial constraintsen_US
dc.titleDoes capital market drive corporate investment efficiency? Evidence from equity lending supplyen_US
dc.status.refereedyesen_US
dc.date.Accepted2021-07-08
dc.date.application2021-07-16
dc.typeArticleen_US
dc.date.EndofEmbargo2023-01-16
dc.type.versionAccepted manuscripten_US
dc.description.publicnotesThe full-text of this article will be released for public view at the end of the publisher embargo on 16 Jan 2023.en_US
refterms.dateFOA2021-07-23T08:24:36Z
dc.openaccess.statusGreenen_US


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