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Short-Selling Bans and the Global Financial Crisis: Are They Interconnected?

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Bohl, M., Essid, B., Siklos, P. Short-Selling Bans and the Global Financial Crisis: Are They Interconnected?. Applied Economics Quarterly, 64(2), 159-177. https://doi.org/10.3790/aeq.64.2.159
Bohl, Martin T.; Essid, Badye and Siklos, Pierre L. "Short-Selling Bans and the Global Financial Crisis: Are They Interconnected?" Applied Economics Quarterly 64.2, , 159-177. https://doi.org/10.3790/aeq.64.2.159
Bohl, Martin T./Essid, Badye/Siklos, Pierre L.: Short-Selling Bans and the Global Financial Crisis: Are They Interconnected?, in: Applied Economics Quarterly, vol. 64, iss. 2, 159-177, [online] https://doi.org/10.3790/aeq.64.2.159

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Short-Selling Bans and the Global Financial Crisis: Are They Interconnected?

Bohl, Martin T. | Essid, Badye | Siklos, Pierre L.

Applied Economics Quarterly, Vol. 64 (2018), Iss. 2 : pp. 159–177

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Bohl, Martin T., Westfälische Wilhelms-University, Münster, Germany.

Essid, Badye, Autorité des marchés financiers, Montréal, QC, Canada.

Siklos, Pierre L., Wilfrid Laurier University and Balsillie School of International Affairs, Waterloo, ON, Canada.

Abstract

Abstract

This paper begins with the observation that short-selling bans spread globally in 2008. We find some evidence that the bans were unsuccessful at least insofar as they did not take into account the global component a short-selling ban which reduced equity returns in about a third of the 17 countries sampled, most notably in some of the major advanced economies. In the individual countries we examine, the bans had relatively little impact. Our results are suggestive as evidence that the bans stemmed further deterioration in stock prices that policy makers sought to avoid, at least in a few economies.

JEL classifications: G10, G12

Keywords: Short-selling bans, spillovers, stock markets, dynamic conditional correlations

Table of Contents

Section Title Page Action Price
Martin T. Bohl / Badye Essid / Pierre L. Siklos: Short-Selling Bans and the Global Financial Crisis: Are They Interconnected? 1
Abstract 1
1. Introduction 1
2. Short-Selling Bans and Stock Market Performance 4
3. Data 7
4. Methodology 7
5. Empirical Results 9
6. Conclusions 1
References 1