Does Short Selling Improve Corporate Social Responsibility?

摘要

Using difference-in-difference (DID) model, this paper studies firms' incentives to engage in corporate social responsibility (CSR) activities based on the quasi-natural experiment. We find that firms experiencing an exogenous increase in their exposure to short sales significantly raise their CSR activities. The results are stronger for firms that are more short sold, higher ratio of the largest shareholder, internal control more effectively. Our evidence is consistent with the argument of CSR being a signaling device used by managers to reduce information asymmetry.