Are Short Sales Beneficial to Financial Markets? Evidence from Euronext Paris
Paris Dauphine University
May 16, 2012
The Second International Conference on Engaged Management Scholarship, Cranfield, UK June 21 – 24, 2012
The objective of this paper is to provide a comprehensive literature review about short selling, one of the most controversial practices in financial markets. The divergence of perception among academics, politicians and professionals is the main cause of this controversy. We first describe efficient market hypothesis and behavioural finance theory, the two major schools of thought in financial research. The short selling theory will be discussed from different angles and in particular in terms of the impact of a short selling ban on the quality of financial markets. In the last section, we propose a research project to be undertaken to assess the effectiveness of the short selling bans imposed by the market authority in France since the beginning of the financial crisis in September 2008.
Number of Pages in PDF File: 16Accepted Paper Series
Date posted: June 15, 2012 ; Last revised: June 26, 2012
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