Analysis of the Impact of Short Selling Mechanisms on Corporate Finance Constraints

Abstract

This study empirically examines the influence of short selling mechanism (SSM) on corporate financing constraints using multi-temporal double-difference method against the background of short selling system in China's capital market, utilizing non-financial firms listed in A-share companies from 2010-2023 as the research sample. The study shows that SSM can effectively alleviate corporate financing constraints. The analysis by nature of property rights finds that the SSM has a more obvious role in alleviating the financing constraints of state-owned enterprises. This study provides policy ideas and countermeasure suggestions to alleviate corporate financing constraints from the dimensions of market regulation, enterprises themselves, and fair competition, in order to promote the healthy and efficient operation of the capital market.