Short-Selling Pressure and Workplace Safety: Curbing Short-Termism Through Stakeholder Interdependencies

Organization Science, Forthcoming

41 Pages Posted: 14 Apr 2022

See all articles by Cuili Qian

Cuili Qian

University of Texas at Dallas

Donal Crilly

London Business School - Department of Strategic & International Management

Yupeng Lin

National University of Singapore

Keyuan Zhang

Shanghai Jiao Tong University; National University of Singapore

Rengong Zhang

City University of Hong Kong (CityU)

Date Written: December 15, 2021

Abstract

We advance a multistakeholder framework that highlights the influence of stakeholders in tempering short-termist responses to capital market pressures. When firms face pressure from short sellers in the capital market, they sometimes shift attention to short-term stock performance and neglect critical investments that pay off in the long run. Relying on a quasi-natural experiment and establishment-level data on workplace injuries, we find that short-selling pressure causes an increase in employee injuries. Critically, however, the degree to which the response is short-termist depends on the salience of multiple stakeholders (analysts, shareholders, employees, and managers). We discuss the implications for understanding firms’ relations with their stakeholders and, particularly, how these stakeholders influence corporate responses to capital market pressures in ways that matter for long-term value creation. This study also contributes to strategy research by highlighting the downside of capital market deregulation.

Keywords: Stakeholder interdependency, Stakeholder salience, Short-selling pressure, Workplace safety, Intertemporal perspective

JEL Classification: M1, M2, M4

Suggested Citation

Qian, Cuili and Crilly, Donal and Lin, Yupeng and Zhang, Keyuan and Zhang, Rengong, Short-Selling Pressure and Workplace Safety: Curbing Short-Termism Through Stakeholder Interdependencies (December 15, 2021). Organization Science, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4062394

Cuili Qian

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Donal Crilly

London Business School - Department of Strategic & International Management ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom

Yupeng Lin

National University of Singapore ( email )

15 Kent ridge drive
Singapore
Singapore

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

Keyuan Zhang (Contact Author)

Shanghai Jiao Tong University ( email )

1954 Huashan Road
Shanghai, Shanghai 200030
China

National University of Singapore ( email )

1 Business Link
Singapore, 117592
Singapore

Rengong Zhang

City University of Hong Kong (CityU) ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

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