Using a unique empirical approach that accounts for the possibility that financial market crashes are endogenously determined by market structures, this study examines how economic freedom contribute to crashes in financial markets. On one hand, economic freedom might provide an unregulated...

Boehmer, Jones, and Zhang (2008a JF) show that informed short sellers do not stealth trade and hypothesize that because short sellers face execution uncertainty caused by the uptick rule, informed short sellers cannot afford to break up their larger trades into smaller trades in order to hide...

We examine daily short-selling activity and prices around reverse stock splits. Using a difference-in-difference approach with a matched sample of reverse splitting and non-reverse splitting stocks, we show that short selling increases in stocks that reverse split, relative to those that do not....

Diether, Lee, and Werner (2009) show that, in general, short sellers are contrarian in both contemporaneous and past returns and able to impressively predict future returns, this study examines these trading characteristics during both the trading day and the after-hours period. Interestingly,...

This paper analyzes the effect of economic freedom on the liquidity of financial markets using a non-traditional approach. Using a sample of 393 American Depositary Receipts (ADRs), we examine the liquidity of these securities while conditioning on the level of economic freedom in the ADR home...

We examine the effect of home market short-sale constraints on stocks that also trade in other countries that have more liberal short-sale rules. We focus on the case of ADRs traded in the U.S., as in some cases, the home markets of these ADRs prohibit short selling. We find that U.S. short...