Abstract: The relationship between short-selling and earnings management has long aroused an interest in the academic community. ANGEL et al. (2004) found that short selling generally occurs before a company releases a negative earnings announcement, indicating that short sellers have the ability to mine trait information and thus have a certain deterrent effect on corporate behavior. Their conclusion is supported by subsequent empirical research.
Since 2010, the impact of short selling mechanisms on earnings management of Chinese listed companies has also attracted attention from the domestic academic community. This type of literature mainly examines the impact of the increase of two financing targets on corporate earnings management.
However, the research by SU and NI (2018) shows that there are two problems when using the two financing targets as explanatory variables: Firstly, financing and short selling are different. The impact of the two on corporate earnings management is significantly different. Secondly, regulatory authorities usually use company level indicators as the decision-making basis, and these characteristics are closely related to corporate behavior, which can further affect whether it can become two financing targets. Therefore, there is an endogeneity problem of mutual influence between the two financing targets and corporate behavior. In fact, after the implementation of margin trading and securities lending, the financing scale far exceeds the margin trading scale.
In order to alleviate the shortage of securities in the short selling market, China Securities and Finance Corporation implemented the securities lending business for 98 margin trading stocks from February 28, 2013. Afterwards, three more expansions were carried out. After the implementation of this system, Chinese securities and financial companies can borrow stocks from shareholders of listed companies, lend them to securities firms, and then borrow securities from short sellers through securities firms. This system effectively alleviates the problem of insufficient securities sources. From this, it can be seen that after the introduction of the Qualified Securities for Short-sale Refinancing system in China, there has been an exogenous increase in the supply of tradable stocks. Pessimistic traders in the market can better express heterogeneity views and integrate more information into stock prices.
This article uses data from one year before and after the implementation of the Qualified Securities for Short-sale Refinancing system in 2013 (2012-2014) to examine the causal relationship between the relaxation of short selling constraints and corporate earnings management using the double difference method. We find that, firstly, benchmark regression indicates that after the relaxation of short selling constraints, earnings management significantly decreases; secondly, heterogeneity analysis shows that the inhibitory effect of relaxing short selling constraints on earnings management is more pronounced in high growth enterprises and private enterprises; finally, in the examination of the mechanism of action, it is found that the relaxation of short selling constraints mainly has an inhibitory effect on earnings management through the executive equity compensation channel. The above research indicates that regulatory authorities should continuously improve the securities lending system and reduce the cost of short selling transactions in order to lay a solid foundation for regulating corporate behavior and effectively protecting investors in the capital market.
We suggest that subsequent literature can examine the economic consequences of the Qualified Securities for Short-sale Refinancing system from the following two aspects: on the one hand, the impact of the Qualified Securities for Short-sale Refinancing system on corporate investment can be examined. Previous literature on the relationship between short selling and corporate investment has faced strong endogeneity issues, and the external impact can be used to alleviate endogeneity problems, thus obtaining the causal impact of short selling on corporate investment; on the other hand, future literature can also examine the impact of the Qualified Securities for Short-sale Refinancing system on the pricing efficiency of the capital market. In existing literature on short selling mechanisms and pricing efficiency, the expansion of the two financing targets is used as a natural experiment. However, it is difficult to us the expansion of the two financing targets to study pricing efficiency to avoid the problem of sample self selection. Adopting the system as a natural experiment can avoid this problem.

Key words: Qualified Securities for Short-sale Refinancing, short selling transactions, earnings management, corporate growth, property rights

摘要： 从2010年开始,卖空机制正式引入中国资本市场。与此同时,有关卖空机制对我国上市公司盈余管理的影响也成为文献中的热点问题,但已有文献尚未解决卖空机制与盈余管理之间的内生性问题。本文以我国独有的转融券制度作为自然实验,运用DID模型研究卖空约束放松与企业盈余管理的因果关系。实证结果表明:首先,基准回归结果表明,卖空约束放松后,企业盈余管理水平明显下降;其次,异质性分析表明,卖空约束放松对企业盈余管理的抑制效应在高成长性企业和民营企业中表现更加明显;最后,机制检验表明,卖空约束放松主要通过高管权益薪酬渠道对盈余管理产生抑制效应。以上研究表明,监管部门应该不断完善融券制度,降低卖空交易成本,为卖空投资者创造更大的操作空间,如此方能提升公司治理水平,并约束企业行为,由此为有效保护投资者奠定良好的资本市场基础。

关键词: 转融券, 卖空交易, 盈余管理, 企业成长性, 产权性质