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The real impacts of public short campaigns: Evidence from stakeholders

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  • Liu, Claire
  • Low, Angie
  • Putnins, Talis

Abstract

Using a novel dataset of firm product introductions, we examine whether public short campaigns (PSCs) have real impacts on targets. Targets introduce fewer new products and experience declines in productivity and product quality relative to matched firms following PSCs. These declines in product outcomes are partly attributed to the withdrawal of support from key stakeholders, resulting in reduced access to external capital, decreased employee commitment, and weakened customer relationships. Our results suggest that the public nature of PSCs has distinctive impacts on target firms compared to traditional short selling, primarily through their impact on the firm's stakeholders.

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  • Liu, Claire & Low, Angie & Putnins, Talis, 2024. "The real impacts of public short campaigns: Evidence from stakeholders," Journal of Corporate Finance, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:corfin:v:88:y:2024:i:c:s0929119924000865
    DOI: 10.1016/j.jcorpfin.2024.102624
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    More about this item

    Keywords

    Public short campaigns; Activist short selling; New product introductions; Real effects; Stakeholder relationship;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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