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Short-selling constraints and firm-level climate change exposure: Evidence from utility firms

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  • Zhang, Wei

Abstract

This study investigates the impact of short selling on firm-level climate change exposure in US utility firms during a period when short selling constraints were exogenously suspended. We find evidence that increasing short selling is associated with greater firm-level climate change exposure.

Suggested Citation

  • Zhang, Wei, 2024. "Short-selling constraints and firm-level climate change exposure: Evidence from utility firms," Economics Letters, Elsevier, vol. 237(C).
    • Handle: RePEc:eee:ecolet:v:237:y:2024:i:c:s0165176524001381
    DOI: 10.1016/j.econlet.2024.111655
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    References listed on IDEAS

    as
    1. Miller, Edward M, 1977. "Risk, Uncertainty, and Divergence of Opinion," Journal of Finance, American Finance Association, vol. 32(4), pages 1151-1168, September.
    2. Vivian W. Fang & Allen H. Huang & Jonathan M. Karpoff, 2016. "Short Selling and Earnings Management: A Controlled Experiment," Journal of Finance, American Finance Association, vol. 71(3), pages 1251-1294, June.
    3. Harrison Hong & Jeremy C. Stein, 2003. "Differences of Opinion, Short-Sales Constraints, and Market Crashes," The Review of Financial Studies, Society for Financial Studies, vol. 16(2), pages 487-525.
    4. Gustavo Grullon & Sébastien Michenaud & James P. Weston, 2015. "The Real Effects of Short-Selling Constraints," The Review of Financial Studies, Society for Financial Studies, vol. 28(6), pages 1737-1767.
    5. Tarek A Hassan & Stephan Hollander & Laurence van Lent & Ahmed Tahoun, 2019. "Firm-Level Political Risk: Measurement and Effects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 2135-2202.
    6. Young, Alex, 2016. "Capital market frictions and conservative reporting: Evidence from short selling constraints," Finance Research Letters, Elsevier, vol. 17(C), pages 227-234.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Climate change; Utility industry; Short selling;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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