With the Lunch Seminar series, the Department of Finance is bringing eminent and up-and-coming researchers from around the world to Luxembourg.
Abstract:
We study the effects of short-selling bans on liquidity and prices through the lens of a model that incorporates a regulator aiming at preventing a significant price decline. Empirically, we evaluate our model’s predictions by exploiting the introduction of short-sales restrictions in some but not all European countries during the COVID-19 pandemic, while measuring the share of informed stockholders with institutional ownership. Consistent with our model, bans were detrimental to market liquidity and failed to support average returns, but were effective in limiting large price drawdowns in countries that implemented short-selling bans, especially for stocks with low institutional ownership.
More about Prof. Kosowski:
Robert Kosowski - Google Scholar
The seminar will be held in place.
Cold lunches are provided to registered participants only.
