Does Stock Manipulation Distort Corporate Investment? The Role of Short Selling Costs and Share Repurchases

2020 ◽  
Author(s):  
Murillo Campello ◽  
Rafael Matta ◽  
Pedro A. C. Saffi
Keyword(s):  
Corporate Investment ◽  
Short Selling ◽  
Share Repurchases ◽  
Stock Manipulation

Islamic banking and corporate investment efficiency: empirical evidence from Malaysia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Moncef Guizani ◽  
Ahdi Noomen Ajmi
Keyword(s):  
Empirical Model ◽  
Generalized Method Of Moments ◽  
Corporate Investment ◽  
Investment Efficiency ◽  
Islamic Banks ◽  
Agency Conflicts ◽  
Content Type ◽  
Listed Firms ◽  
Lower Effect

PurposeThe purpose of this paper is to examine whether and how Islamic banks' financing affects corporate investment efficiency.Design/methodology/approachTo achieve the research purpose, an empirical model was constructed to describe the relationship between Islamic banks' financing and corporate investment efficiency. The empirical model was tested through generalized method of moments (GMM) estimation technique using a panel data of 163 Malaysian listed firms for the period 2007–2017.FindingsThis study provides evidence that Islamic banks' financing plays an important role in enhancing investment efficiency and that this positive effect comes mainly from non-PLS contracts. Moreover, the results show that the effect of Islamic banks' financing in preventing suboptimal investments is stronger in the financial crisis period. The results also reveal that the contribution of Islamic banks' financing in reducing suboptimal investments is more prominent when firms face over-investment problems.Research limitations/implicationsThis research contributes to the debate on the financial implications of Islamic banks' financing modes by exploring their effect on corporate investment efficiency.Practical implicationsFrom a managerial perspective, the research findings are beneficial to Islamic bank managers to the extent that they highlight the role of Islamic financial contracts in improving corporate investment efficiency. In addition, the lower effect of PLS contracts on investment efficiency implies that policymakers in Malaysia should multiply their efforts to further expand the PLS financing.Originality/valueThis paper offers some insights on the role of Islamic banks' financing in mitigating agency conflicts and reducing asymmetric information problems. It is the first attempt focusing on the role of Islamic financing in fostering corporate investment decisions.

scholarly journals Behavioral CEOs: The Role of Managerial Overconfidence

2015 ◽  
Vol 29 (4) ◽  
pp. 37-60 ◽  
Author(s):  
Ulrike Malmendier ◽  
Geoffrey Tate
Keyword(s):  
Empirical Evidence ◽  
Investment Decisions ◽  
Corporate Investment ◽  
Financing Constraints ◽  
Managerial Overconfidence ◽  
Empirical Framework

In this paper, we provide a theoretical and empirical framework that allows us to synthesize and assess the burgeoning literature on CEO overconfidence. We also provide novel empirical evidence that overconfidence matters for corporate investment decisions in a framework that explicitly addresses the endogeneity of firms' financing constraints.

Muddying the waters: when does short selling become market manipulation?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Gregory Durston
Keyword(s):  
Design Methodology ◽  
Stock Exchange ◽  
Listed Company ◽  
Short Selling ◽  
Market Manipulation ◽  
London Stock Exchange ◽  
Content Type ◽  
High Court ◽  
Regulatory Actions

Purpose This paper aims to consider “spoofing”, “layering” and “short reports” in the context of market manipulation and, in particular, a recent controversy involving a short-selling attack on a major UK listed company that was considered by the High Court. Design/methodology/approach The very demanding legal and evidential prerequisites and practical difficulties, involved in bringing both criminal and regulatory actions in such cases are identified and discussed, as is the role of the Financial Conduct Authority. Findings These challenges help explain why so few actions of this type are brought. Originality/value This is the first paper to consider the implications of Burford Capital Limited v London Stock Exchange Plc [2020] EWHC 1183 (Comm).

scholarly journals On the role of Föllmer-Schweizer minimal martingale measure in risk-sensitive control asset management

2015 ◽  
Vol 52 (3) ◽  
pp. 703-717
Author(s):  
Amogh Deshpande
Keyword(s):  
Asset Management ◽  
Optimal Strategy ◽  
Stock Price ◽  
Short Selling ◽  
Martingale Measure ◽  
Minimal Martingale Measure ◽  
Risk Sensitive ◽  
Risk Sensitive Control ◽  
Riskless Asset

Kuroda and Nagai (2002) stated that the factor process in risk-sensitive control asset management is stable under the Föllmer-Schweizer minimal martingale measure. Fleming and Sheu (2002) and, more recently, Föllmer and Schweizer (2010) observed that the role of the minimal martingale measure in this portfolio optimization is yet to be established. In this paper we aim to address this question by explicitly connecting the optimal wealth allocation to the minimal martingale measure. We achieve this by using a ‘trick’ of observing this problem in the context of model uncertainty via a two person zero sum stochastic differential game between the investor and an antagonistic market that provides a probability measure. We obtain some startling insights. Firstly, if short selling is not permitted and the factor process evolves under the minimal martingale measure, then the investor's optimal strategy can only be to invest in the riskless asset (i.e. the no-regret strategy). Secondly, if the factor process and the stock price process have independent noise, then, even if the market allows short-selling, the optimal strategy for the investor must be the no-regret strategy while the factor process will evolve under the minimal martingale measure.

scholarly journals Momentum and reversal: The role of short selling

2019 ◽  
Vol 104 ◽  
pp. 95-110
Author(s):  
Zhaobo Zhu ◽  
Xinrui Duan ◽  
Licheng Sun ◽  
Jun Tu
Keyword(s):  
Short Selling

scholarly journals Regulatory Politics And Short Selling

2009 ◽  
Vol 71 (3) ◽  
Author(s):  
Erik R. Sirri
Keyword(s):  
Short Selling ◽  
Regulatory Framework ◽  
Market Quality ◽  
The Past ◽  
External Influences ◽  
Quality Issues ◽  
Regulatory Politics

The SEC has plenary authority over the short selling of exchangeregistered securities. In the past it has altered the regulatory framework for short selling only occasionally, relying primarily on no-action letters to guide evolving practices and issues. Since early 2008, the SEC promulgated, either on a proposing, final, interim-final, or emergency basis, a raft of rules related to short selling, all of which generally restrict the ability of investors to sell stocks short. Much of this rulemaking reverses a course of policy set out by the SEC to carefully balance efficiency and market quality issues. This paper considers various reasons the SEC may have struck out on such a divergent course. In particular, it highlights the role of external influences on the SEC as it relates to short selling policy.

Sign in / Sign up

Export Citation Format

Share Document