Short-Selling Pressure and Directional Asymmetry in Earnings Management: Evidence from Expansions in Margin-Trading and Securities-Lending Eligibility

Zhonghua Yang

doi:10.47297/wspdecWSP2515-797311.20261006

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Short-Selling Pressure and Directional Asymmetry in Earnings Management: Evidence from Expansions in Margin-Trading and Securities-Lending Eligibility

Volume 10, Issue 6

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Short-Selling Pressure and Directional Asymmetry in Earnings Management: Evidence from Expansions in Margin-Trading and Securities-Lending Eligibility
Short-Selling Pressure and Directional Asymmetry in Earnings Management: Evidence from Expansions in Margin-Trading and Securities-Lending Eligibility
Guangzhou College of Commerce, Guangzhou, Guangdong, 511363, China
Vol. 10, Issue 6, Pages: 66-73(2026)
Published：30 June 2026
DOI：10.47297/wspdecWSP2515-797311.20261006
Accepted：

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Yang Zhonghua.Short-Selling Pressure and Directional Asymmetry in Earnings Management: Evidence from Expansions in Margin-Trading and Securities-Lending Eligibility[J].Development Economics of China,2026,10(06):66-73.
DOI：

Yang Zhonghua.Short-Selling Pressure and Directional Asymmetry in Earnings Management: Evidence from Expansions in Margin-Trading and Securities-Lending Eligibility[J].Development Economics of China,2026,10(06):66-73. DOI： 10.47297/wspdecWSP2515-797311.20261006.

摘要

Abstract

Using nonfinancial firms listed on the Shanghai and Shenzhen A-share markets from 2014–2024

this paper examines short-selling pressure and the direction of abnormal accruals through expansions of margin-trading and securities-lending eligibility. After ST

*ST

and suspended-listing observations are excluded according to firm-year status

the two-way fixed-effects estimates show that entry into fully shortable status is significantly associated with lower positive abnormal accruals. The treatment effect on positive abnormal accruals is also significantly more negative than that on downward abnormal accruals. The findings are consistent across gross and net fixed-asset specifications and in the transition-year-excluded sample. Probability tests provide conditional supplementary support

although the dynamic diagnostics reveal limitations in the pretreatment period. The results are therefore interpreted as stable directional evidence from TWFE models

rather than as an unconditional causal effect.

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references

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