The Impact of Short Selling Mechanism on Enterprise Internal Control
DOI:
https://doi.org/10.6981/FEM.202508_6(8).0007Keywords:
Short Selling Mechanism; Internal Control; Corporate Governance; Double Difference Model; Heterogeneity Analysis.Abstract
This paper, according to data of Chinese A-share listed companies from 2014 to 2023, the effect of short selling mechanisms on the quality of internal control of the company is studied by using the DID method. The study finds that short selling significantly enhances corporate internal control levels, a finding that remains robust after controlling for endogeneity, changing the measurement method of variables, and considering firm heterogeneity. Heterogeneity analysis shows that short-selling is more effective in improving internal control of state-owned enterprises and low-risk industries. This research offers theoretical and practical insights for capital market opening policies and corporate internal control construction, supporting the orderly expansion of short selling targets to enhance governance effects.
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