Operating Under the Radar: Short Selling Pressure and Employee Injuries

Posted: 27 May 2018 Last revised: 23 Jun 2018

See all articles by Yupeng Lin

Yupeng Lin

National University of Singapore

Keyuan Zhang

National University of Singapore (NUS) - Department of Accounting

Rengong Zhang

University of Alberta - Department of Accounting, Operations & Information Systems

Date Written: May 17, 2018

Abstract

This study examines how short sellers affect the workplace safety of firm employees. Relying on a quasi-natural experiment instituted by Reg SHO, we find that short selling pressure causes an increase in employee injuries. This effect is more pronounced for firms with greater incentives to meet/beat predetermined targets, those with higher analyst coverage, those with more short-term institutional ownership, or remote establishments. Further analyses reveal that protection from a labor union can help to mitigate the negative effect of short selling pressure on workplace safety. Overall, our findings indicate that short sellers emphasize pecuniary benefits but overlook nonpecuniary losses. The resultant cost is borne by the front-line employees. Our paper provides first-hand evidence of a dead-weight loss due to short selling pressure.

Keywords: Short Sell Pressure, Short-Termism, Employee Injuries, Workplace Safety

Suggested Citation

Lin, Yupeng and Zhang, Keyuan and Zhang, Rengong, Operating Under the Radar: Short Selling Pressure and Employee Injuries (May 17, 2018). Available at SSRN: https://ssrn.com/abstract=3179909

Yupeng Lin (Contact Author)

National University of Singapore ( email )

15 Kent ridge drive
Singapore
Singapore

HOME PAGE: http://sites.google.com/site/scottlinyupeng/

Keyuan Zhang

National University of Singapore (NUS) - Department of Accounting ( email )

1 Business Link
Singapore, 117592
Singapore

Rengong Zhang

University of Alberta - Department of Accounting, Operations & Information Systems ( email )

Edmonton, Alberta T6G 2R6
Canada

Register to save articles to
your library

Register

Paper statistics

Abstract Views
414
PlumX Metrics