Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 9, 2022 erstellt
Beschreibung:
We examine the impact of economic policy uncertainty on the trading activity of short sellers. We document an increase in shorting flow of overvalued stocks during periods of high policy uncertainty. The results hold after controlling for endogeneity, macroeconomic factors, and different measurements. The transaction cost represented by institutional shareholding ratio moderates the impact of economic policy uncertainty on short sellers. Uncertainty about fiscal policy, taxes, government spending, entitlement programs, and national security are the main reasons for changes in shorting flow. Furthermore, our paper responds to a call recently made by Jiang, Habib, and Hasan (2022) for future research on how short sellers trade company shares during periods of high economic and political uncertainty