Research on the Relationship between Short Selling Mechanism and Corporate Investment Efficiency

Yihan Wang

doi:10.47297/wspdecWSP2515-797310.20261004

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Research on the Relationship between Short Selling Mechanism and Corporate Investment Efficiency

Volume 10, Issue 4

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Research on the Relationship between Short Selling Mechanism and Corporate Investment Efficiency
Research on the Relationship between Short Selling Mechanism and Corporate Investment Efficiency
Henan University of Economics and Law, Zhengzhou, Henan, 450046, China
Vol. 10, Issue 4, Pages: 52-57(2026)
Online First：29 July 2026，

Published：30 April 2026
DOI：10.47297/wspdecWSP2515-797310.20261004
Accepted：

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Wang Yihan.Research on the Relationship between Short Selling Mechanism and Corporate Investment Efficiency[J].Development Economics of China,2026,10(04):52-57.
DOI：

Wang Yihan.Research on the Relationship between Short Selling Mechanism and Corporate Investment Efficiency[J].Development Economics of China,2026,10(04):52-57. DOI： 10.47297/wspdecWSP2515-797310.20261004.

摘要

Abstract

The impact of the short selling mechanism on corporate micro-behavior is examined in this paper

which is an important topic in the field of corporate finance. This is due to the fact that the short selling mechanism is a crucial part of the core capital market trading system. Using the progressive expansion of the margin trading and short selling system as a quasi-natural experimental scenario

the current study uses a sample of Chinese A-share listed businesses from 2010 to 2024. The effect of the short selling mechanism on corporate investment efficiency and its underlying mechanisms is systematically analyzed using a multi-period difference-in-differences model. The following are the study's conclusions: It has been demonstrated that the short selling mechanism greatly reduces unproductive corporate investment

improving total investment efficiency. Although it may also worsen under-investment

this mainly shows up as a suppression of over-investment. It has been shown that the governance effect of the short selling mechanism on inefficient investment is considerably positively moderated by the shareholding of institutional investors. Furthermore

it has been demonstrated that independent institutional investors have a greater moderating impact than non-independent institutional investors. It has been discovered that the short selling mechanism and corporate wasteful investment are somewhat mediated by financing limitations.Furthermore

heterogeneity analysis indicates that the governance effect of the short selling mechanism is more pronounced in private enterprises

companies with higher board independence

and those with a higher degree of separation of ownership and control. The present study provides empirical evidence and policy references for improving China's margin trading and short selling system

optimising the resource allocation function of capital markets

and enhancing corporate investment efficiency.

关键词

Keywords

references

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