Short selling pressure and tone management: evidence from regulation SHO
利用SHO规则这一准自然实验，研究发现放松卖空限制后，试点公司在业绩电话会中使用更消极的语调，且这种语调更好地反映了未来盈余，表明卖空者对语调管理起到治理作用。
We study the causal effect of short selling on managers’ tone during earnings conference calls. Utilising Regulation SHO, a pilot scheme governing short-selling activity, we find that pilot firms with relaxed short-selling constraints use more negative tone. This effect is more pronounced for firms that are easier to short sell, those where managers have an incentive to manipulate tone, and those that engage in less earnings management. Moreover, the negative relationship between tone and future earnings no longer holds for the pilot firms after Reg SHO, suggesting that the tone of conference calls by pilot firms better reflects their future earnings after the regulation. Overall, our findings suggest that short sellers play a corporate governance role in tone management.