{"title":"Reputation and recency: How do aggressive short sellers assess ESG-Related Information?","authors":"Stephen E. Christophe , Jim Hsieh , Hun Lee","doi":"10.1016/j.jbusres.2024.114718","DOIUrl":null,"url":null,"abstract":"<div><p>We examine the effects of short- and long-term as well as positive and negative ESG reputation of companies on aggressive short selling. Our results suggest that aggressive short selling is most associated with recent and negative ESG-related news. These findings are consistent with the recency and negativity biases of reputation literature. When we separate the companies into positive and negative long-term ESG reputation, we find that aggressive short selling occurs most frequently in the subgroup of companies that possess a long-term, negative ESG reputation jointly with recent, negative ESG-related information. Interestingly, however, we do not find that the aggressive short selling of this subgroup is followed by significantly negative abnormal returns. Instead, we find significant negative abnormal returns following aggressive shorting of the subgroup with a long-term, positive ESG reputation coupled with recent, negative ESG-related information, which is consistent with the expectancy violation theory of reputation literature.</p></div>","PeriodicalId":15123,"journal":{"name":"Journal of Business Research","volume":null,"pages":null},"PeriodicalIF":10.5000,"publicationDate":"2024-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Business Research","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0148296324002224","RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 0
Abstract
We examine the effects of short- and long-term as well as positive and negative ESG reputation of companies on aggressive short selling. Our results suggest that aggressive short selling is most associated with recent and negative ESG-related news. These findings are consistent with the recency and negativity biases of reputation literature. When we separate the companies into positive and negative long-term ESG reputation, we find that aggressive short selling occurs most frequently in the subgroup of companies that possess a long-term, negative ESG reputation jointly with recent, negative ESG-related information. Interestingly, however, we do not find that the aggressive short selling of this subgroup is followed by significantly negative abnormal returns. Instead, we find significant negative abnormal returns following aggressive shorting of the subgroup with a long-term, positive ESG reputation coupled with recent, negative ESG-related information, which is consistent with the expectancy violation theory of reputation literature.
期刊介绍:
The Journal of Business Research aims to publish research that is rigorous, relevant, and potentially impactful. It examines a wide variety of business decision contexts, processes, and activities, developing insights that are meaningful for theory, practice, and/or society at large. The research is intended to generate meaningful debates in academia and practice, that are thought provoking and have the potential to make a difference to conceptual thinking and/or practice. The Journal is published for a broad range of stakeholders, including scholars, researchers, executives, and policy makers. It aids the application of its research to practical situations and theoretical findings to the reality of the business world as well as to society. The Journal is abstracted and indexed in several databases, including Social Sciences Citation Index, ANBAR, Current Contents, Management Contents, Management Literature in Brief, PsycINFO, Information Service, RePEc, Academic Journal Guide, ABI/Inform, INSPEC, etc.