We propose a risk-based firm-type explanation on why stocks of firms with high relative short interest (RSI) have lower future returns. We argue that these firms have negative alphas because they are a hedge against expected aggregate volatility risk. Consistent with this argument, we show that...

We examine whether short sellers identify firms that have significant changes in default likelihoods and credit rating downgrades. In the month before a rating downgrade, equity short interest is 40% higher than one year prior. Short sellers predict changes in default probabilities that lead to...

In recent years, some of China’s leading firms have made headlines with their European expansion, by either opening new facilities or by acquiring or merging with significant enterprises in Europe. The goal of this paper is to contribute to the existing literature by examining Chinese...

There have been a number of studies shedding light on the characteristics of business angels and their investment behavior across the world, but few are in the Chinese context. This study provides an initial profile of Chinese business angels via a questionnaire survey. Based on a sample of 78...

We evaluate the over-valuation hypothesis and merger arbitrage price pressure hypothesis as potential explanations for the observed negative returns to stock acquirers around merger announcement. Using daily shorting flow data, we show that the majority of the negative announcement returns can...

The recent improvement of numerical weather prediction (NWP) models has a strong potential for extending the lead time of precipitation and subsequent flooding. However, uncertainties inherent in precipitation outputs from NWP models are propagated into hydrological forecasts and can also be...